Rising Treasury Yields and Oil Prices Put Wall Street Under Fresh Pressure: Dow Jones, S&P, Nasdaq, Futures

Rising Treasury Yields and Oil Prices Put Wall Street Under Fresh Pressure: Dow Jones, S&P, Nasdaq, Futures

Fiona Craig

Tue, August 18, 2026 at 4:13 PM GMT+3 3 min read

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U.S. stocks were set for another weaker start on Tuesday, with major index futures pointing lower after Wall Street retreated during the previous two sessions.

Technology shares appeared particularly vulnerable, with Nasdaq 100 futures falling 1.3% as rising Treasury yields increased pressure on growth-oriented stocks. The 30-year U.S. bond yield climbed to its highest level in almost two decades as investors continued to assess inflation risks linked to the conflict in the Middle East.

Higher Oil Prices Add to Inflation Concerns

Energy markets remained another source of uncertainty for investors. U.S. crude oil futures advanced 0.8% after jumping 2.6% on Monday as hopes faded for an agreement between the United States and Iran.

The renewed rise in crude prices has reinforced concerns that energy costs could keep inflation elevated, potentially complicating the outlook for monetary policy even as recent U.S. economic data has softened.

Daniela Hathorn, Senior Market Analyst at Capital.com, noted the increase in treasury yields comes "despite softer recent economic data reducing expectations for an imminent Fed hike."

"Instead, the long end is responding to persistent inflation risks, heavy government borrowing and growing competition for capital—including debt issuance associated with the AI investment boom," Hathorn said.

She added, "That creates an uncomfortable environment for equities because financial conditions can tighten even without the Fed raising rates."

Wall Street Extends Retreat From Record High

Tuesday's weaker futures followed another negative session for U.S. equities on Monday.

After a directionless start, the major averages moved lower as the session progressed, extending the modest declines recorded on Friday.

The S&P 500 dropped 40.70 points, or 0.5%, to finish at 7,745.06, ending near its session low and moving further away from the record closing level reached last Thursday.

The Dow Jones Industrial Average declined 272.63 points, or 0.5%, to 53,459.78, while the Nasdaq Composite lost 84.25 points, or 0.3%, to close at 26,644.91.

Iran Tensions Drive Crude Oil Rally

Monday's market weakness coincided with a sharp increase in crude prices as investors responded to signs that tensions in the Middle East could escalate again.

U.S. crude futures surged more than 2% amid indications that Iran had ruled out negotiations with Washington over extending a 60-day ceasefire due to expire on Tuesday.

"We did not start any negotiations at all, and the U.S. violated the understanding from the very beginning; therefore, the 60-day issue is not relevant," Iran Foreign Ministry spokesman Esmail Baghaei said, according to state news agency Tasnim.

Geopolitical concerns intensified further after President Donald Trump threatened Oman during an interview with Fox News, warning, "If Oman gets in the way, we'll bomb the s— out of them."

The remarks came as Iran and Oman appeared to be moving closer to an understanding concerning management of the Strait of Hormuz, a strategically important route for global energy shipments.

Airlines and Software Stocks Lead Monday's Declines

Higher crude prices placed substantial pressure on airline shares during Monday's trading, with the NYSE Arca Airline Index dropping 2.8%.

Software companies also suffered significant losses, sending the Dow Jones U.S. Software Index down 2.7%.

Telecommunications, computer hardware and housing stocks were among the other weaker areas of the market.

In contrast, oil producers benefited from rising energy prices, while biotechnology and semiconductor shares also recorded notable gains.

With Treasury yields continuing to climb and geopolitical uncertainty supporting higher oil prices, investors face the prospect of tighter financial conditions even without an immediate Federal Reserve rate increase, leaving Wall Street vulnerable to extending its recent pullback.

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