Equities Advance as Bond Yields Ease, Oil Climbs on Iran Tensions

The S&P 500 Index ($SPX) (SPY) rose by +0.58% today, the Dow Jones Industrial Average ($DOWI) (DIA) gained +0.55%, and the Nasdaq 100 Index ($IUXX) (QQQ) added +0.07%. E-mini S&P futures (ESU26) advanced +0.61%, and September E-mini Nasdaq futures (NQU26) edged up +0.05%.

Stock indices climbed higher today, with the Nasdaq 100 recovering from a 1.5-week low. Broader market sentiment received support from declining U.S. bond yields. The 10-year T-note yield dropped -6 basis points to 4.64% following the U.S. Treasury’s announcement to enhance liquidity and double the size of buybacks for longer-dated nominal coupon securities to at least $4 billion. However, weakness in semiconductor and AI infrastructure stocks persisted, capping gains in the Nasdaq 100.

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On the positive front, shares of Moderna (MRNA) surged over +120% after announcing positive results from its personalized cancer vaccine trial with Merck & Co (MRK). Additionally, the Trump administration postponed 50% tariffs on select Canadian goods for three days, just under two hours before implementation, citing a tentative agreement between both nations.

Mortgage activity dipped slightly, with U.S. MBA mortgage applications falling -0.4% in the week ending August 14. The purchase mortgage sub-index declined -2.0%, while the refinancing index rose +1.5%. The average 30-year fixed-rate mortgage remained steady at 6.77%.

Oil prices continued upward due to ongoing geopolitical uncertainty in the Middle East. West Texas Intermediate (WTI) crude futures (CLU26) reached a three-week high as tensions escalated following the United Arab Emirates cutting economic ties with Iran over alleged missile strikes. President Trump indicated no interest in reviving the previous nuclear deal with Iran, further complicating efforts to restore calm to global supply routes.

Energy Secretary Chris Wright emphasized that the U.S. is pursuing a long-term strategy regarding Iran, suggesting no immediate plans to de-escalate the conflict, which keeps pressure on energy markets.

Treasury Secretary Scott Bessent hinted at forthcoming economic sanctions against Iran, describing them as unprecedented measures aimed at intensifying isolation. These actions build upon an existing naval blockade targeting Iranian ports.

Despite diplomatic rhetoric, shipping through the Strait of Hormuz remains disrupted. An Iranian military spokesperson reiterated that safe passage requires Tehran’s approval, countering President Trump’s claims of U.S. dominance over the waterway.

Looking ahead, robust Q2 earnings expectations continue to support equities. According to Bloomberg Intelligence, the S&P 500 is poised for near 32% earnings growth this quarter—surpassing initial forecasts of +23% and significantly exceeding historical averages outside the pandemic era. Artificial intelligence investment continues to anchor this momentum, accounting for approximately 60% of projected EPS growth among large-cap firms.

Market participants currently assign a 36% probability of a 25-basis-point rate hike at the upcoming FOMC meeting scheduled for September 15-16.

Global Markets

Overseas markets traded mostly lower today. The Euro Stoxx 50 slipped -0.28%, hitting a two-week low, while China’s Shanghai Composite fell -2.40% to a 1.5-week trough. Japan’s Nikkei-225 plunged -3.16%, marking its steepest decline in over a week.

Interest Rate Outlook

September 10-year Treasury notes (ZNU6) climbed +10 ticks, pushing yields down to 4.643%. The Treasury’s expanded buyback program for long-term debt helped buoy prices, though gains were capped by rising oil costs and increasing inflation expectations. The 10-year breakeven inflation rate rose to a two-month high of 2.319%. Upcoming auctions, including today’s $16 billion 20-year bond offering, also weighed on sentiment.

European bond markets saw mixed movements. Germany’s 10-year bund yield eased to 3.255%, down from earlier highs. Meanwhile, UK gilt yields dipped to 5.042%. Domestic data showed UK July CPI increased +2.9% year-over-year, aligning with estimates, while core inflation came in slightly hotter at +2.6%.

Investors see a 95% likelihood of a 25-basis-point rate hike by the European Central Bank during its September 10 policy session.

U.S. Equity Movers

Mining stocks rallied strongly following gains in commodity prices spurred by Treasury buyback announcements. Hecla Mining (HL) and Coeur Mining (CDE) each rose over +12%, while Newmont Corp (NEM) and AngloGold Ashanti (AU) advanced beyond +8%. Barrick Mining (GOLD) and Southern Copper (SCCO) posted similar upside, alongside Freeport-McMoRan (FCX).

Software equities also gained traction, benefiting the broader market landscape. ServiceNow (NOW) surged over +6%, with Atlassian Corp (TEAM) and Thomson Reuters (TRI) climbing past +5%. Salesforce (CRM), Autodesk (ADSK), and Workday (WDAY) posted modest increases, along with Adobe (ADBE) and Intuit (INTU).

Crypto-linked equities traded higher as Bitcoin (^BTCUSD) scaled a three-week peak. MicroStrategy (MSTR) led the charge within the Nasdaq 100, up over +11%, followed closely by Circle Internet Group (CRCL), up +10%. Coinbase Global (COIN) rose over +9%, complemented by notable moves from Galaxy Digital (GLXY), MARA Holdings (MARA), and Riot Platforms (RIOT).

Conversely, semiconductor and AI infrastructure stocks faced renewed pressure. The iShares Semiconductor ETF (SOXX) declined over -2%, dragged down by Seagate Technology (STX), off -6%, and Broadcom (AVGO), Western Digital (WDC), AMD, AMAT, Intel (INTC), and Lam Research (LRCX), all trading lower.

Cybersecurity names encountered selling pressure as risk appetite waned. CrowdStrike Holdings (CRWD) dropped over -6%, followed by Fortinet (FTNT), Cloudflare (NET), Okta (OKTA), and Zscaler (ZS).

Among top performers, Moderna (MRNA) soared over +120%, buoyed by strong trial data. Merck & Co (MRK) also enjoyed a boost, rising over +10%. Estee Lauder (EL) jumped +16% after reporting quarterly revenue ahead of estimates.

In contrast, La-Z-Boy (LZB) plunged over -17% following weak guidance, while Nebius Group NV (NBIS) fell over -9% amid financing concerns. Mercury Systems (MRCY) also reported disappointing results, leading to a -4% drop.

Earnings Reports (8/19/2026)

Companies reporting earnings include Analog Devices Inc (ADI), Bill Holdings Inc (BILL), Estee Lauder Cos Inc/The (EL), Lowe’s Cos Inc (LOW), Nordson Corp (NDSN), Target Corp (TGT), TJX Cos Inc/The (TJX), and Viking Holdings Ltd (VIK).

At the time of publication, Rich Asplund did not hold any positions in the securities referenced herein. This content is provided solely for informational purposes.

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