US stocks drop again as bond yields jump

U.S. stocks experienced a decline on Tuesday (Aug 18) as soaring bond yields and rising oil prices dampened investor confidence. The yield on the 30-year U.S. Treasury bond hit its highest level in almost two decades, with similar increases occurring for bonds from Germany, Japan, and other nations. Jack Ablin of Cresset Capital noted that bond yields were casting a "pretty dark cloud" over the equity markets, particularly affecting technology stocks.

By the third minute of trading, the Dow Jones Industrial Average had slipped by 0.1 percent, reaching 53,388.39. The S&P 500, a broader market indicator, dropped 0.5 percent to 7,707.42, while the Nasdaq Composite Index fell 1.1 percent to 26,354.54. The increase in bond yields was attributed to the expectation that inflation would continue, alongside concerns about the United States' fiscal deficits and those of other major economies.

Additionally, oil prices rose as hopes for a swift reopening of the Strait of Hormuz diminished, amid ongoing tensions between the United States and Iran regarding the conditions for its opening.