Oil, Rising Yields Push Dow Down $120

2026-08-18

Concerns Over Middle East Intensify

The Dow Jones Industrial Average opened lower for a third straight session in U.S. trading on the 18th, standing at 53,339.25, down $120.53 from the previous day, as of 9:35 a.m. Oil prices rose amid uncertainty over the situation in the Middle East, while rising interest rates globally also weighed on equities.

Oil and Interest Rates Weigh

In U.S. crude futures trading on the 18th, the front-month September contract for West Texas Intermediate briefly climbed to the upper $85 range per barrel, reaching its highest level since late July. Iranian Parliament Speaker Mohammad Bagher Ghalibaf said the same day that the Strait of Hormuz would not be reopened until the United States fulfills its commitments. The United Kingdom Maritime Trade Operations agency, or UKMTO, also announced the same day that a vessel had been attacked in the Strait of Hormuz, strengthening views that the recovery of energy shipments would be delayed.

Selling Pressure Also Hits Bond Market

In the U.S. bond market, the yield on 30-year Treasuries briefly reached 5.33%, its highest level since 2007. In addition to inflation concerns stemming from higher oil prices, the backdrop includes worsening fiscal conditions in various countries and funding needs related to artificial intelligence investment. Long-term yields have also risen notably in Japan and Europe, while related stocks have been sold on views questioning the sustainability of massive AI infrastructure investments.

Major Stocks Mixed

The Dow has pared its losses after selling in major stocks subsided. Some defensive stocks, which tend to move in the opposite direction of technology shares, attracted buying. Within the Dow, Caterpillar, Nvidia and Goldman Sachs fell, while Cisco Systems and Amazon.com were also sold. Home Depot, which reported results for the May-July 2026 period on the 18th, traded narrowly. In contrast, Johnson & Johnson (J&J), Travelers and Salesforce rose. The technology-heavy Nasdaq Composite also opened lower for a third straight session, with semiconductor-related stocks such as Micron Technology, Intel and Applied Materials (AMAT) showing notable declines. SpaceX and Meta Platforms also fell.

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