Geopolitical Risks Keep Markets on Edge 21/08/2026
Market Wrap
US stocks fell sharply on Thursday as Treasury yields resumed their climb, fueling concerns that persistently high borrowing costs could become a growing obstacle for the equity rally despite the Treasury Department’s expanded debt-buyback program.
The Dow Jones Industrial Average dropped 704 points, or 1.3%, to 52,759.21, weighed down by a 9% decline in Walmart (WMT). The S&P 500 fell 0.9% to 7,641.16, while the Nasdaq Composite lost 1% to close at 26,067.17.
Bond yields moved higher again, with the 10-year Treasury yield rising more than 5 basis points to 4.70% and the 30-year yield climbing to 5.25%. The renewed advance came despite the Treasury’s efforts to support liquidity through larger purchases of longer-dated government debt, raising doubts over whether the program can provide lasting relief.
Oil added another source of pressure as prices climbed amid escalating tensions between Washington and Tehran. President Donald Trump threatened a major new economic campaign against Iran, keeping geopolitical and energy-supply risks firmly in focus.
Friday’s economic calendar is relatively light, leaving markets with fewer major catalysts. Flash manufacturing PMI and price data will be the key releases, while investors remain focused on Treasury yields, oil prices and geopolitical developments heading into the weekend.
Treasury Selloff Returns Despite Buyback Plan
The US bond market’s brief relief proved short-lived on Thursday as long-term Treasury yields resumed their climb, despite the Treasury Department’s expanded debt-buyback program.
The 10-year yield rose about 5 basis points to 4.69%, while the 30-year yield climbed back above 5.25%, near its highest level since 2007. The rebound came as the US national debt reached $40 trillion and investors continued to demand greater compensation for inflation, fiscal risk and heavy government borrowing.
Oil remains a major driver of the move. Brent crude climbed above $93 a barrel as the US-Iran conflict entered its sixth month, keeping energy costs and inflation expectations elevated. Analysts said rising crude prices are currently exerting more pressure on yields than concerns over the effectiveness of Treasury Secretary Scott Bessent’s buyback strategy.
The broader supply picture is also becoming more challenging. Investors are preparing for potentially around $200 billion of corporate bond issuance in September, much of it linked to hyperscalers financing the AI data-center buildout. That additional supply could compete with Treasurys for investor capital and keep borrowing costs elevated.
The pressure has spilled into equities, with the S&P 500 (SPX), Nasdaq Composite (COMP) and Dow (DJIA) all lower for the week. Meanwhile, gold (GC00) and bitcoin (BTCUSD) have attracted fresh demand as some investors reconsider traditional Treasury exposure.
For now, analysts see limited scope for a sustained decline in long-term yields unless inflation cools more decisively, economic growth weakens or the labor market deteriorates.
Stocks on the Move
- Walmart (WMT): Shares tumbled 9% after second-quarter revenue topped estimates but comparable sales growth of 2.6% missed expectations. Third-quarter and full-year earnings guidance also came in below Wall Street forecasts.
- Deere (DE): Shares jumped nearly 9% after fiscal third-quarter earnings and revenue comfortably beat estimates. The company also raised the lower end of its full-year net income outlook.
- Webull (BULL): Shares gained more than 4% after second-quarter adjusted operating income and revenue both exceeded expectations, signaling stronger profitability and trading activity.
- Crypto stocks — Coinbase (COIN), Strategy (MSTR), Circle Internet (CRCL), Mara Holdings (MARA), American Bitcoin (ABTC): Shares rallied alongside bitcoin and ether as President Donald Trump pushed Congress to advance crypto-friendly legislation. Coinbase, Strategy and Circle gained about 8%, Mara jumped 12% and American Bitcoin added 7%.
Watchlist: MRNA, WMT, SNDK, XOM, COIN, MSTR, BJ, BKE, AAPL, MSFT
Key Economic Events Today
Economic Data (EST)
- 9:45 AM — USD Flash Manufacturing PMI
- 9:45 AM — USD Flash Services PMI
Earnings
Before Market Open: KE Holdings (BEKE), BJ’s Wholesale (BJ), Buckle Inc. (BKE)
