General Market News

US stocks fell on Tuesday as rising bond yields and elevated oil prices heightened inflation concerns. The Dow dropped 116 points (0.22%), while the S&P 500 declined 0.69% and the Nasdaq fell 1.33%, with semiconductor stocks leading the technology sector selloff. The US 30-year Treasury yield reached its highest level since 2007 amid escalating US-Iran tensions that pushed oil to $84.94 per barrel.

• Semiconductor stocks suffered steep losses, with Western Digital down 7%, SanDisk falling 9%, and Marvell Technology declining 9%, as rising yields pressured high-growth tech valuations
• Bond yields surged globally: US 30-year Treasury hit 2007 highs, Japan's 10-year reached a three-decade peak, and Germany's 30-year climbed to 2011 levels
• Investors rotated to defensive sectors (healthcare and consumer staples outperformed) as the CBOE Volatility Index climbed to its highest level since August 5, with markets awaiting Fed minutes and Nvidia earnings

U.S. Treasury yields are rising to multi-year highs, driven by heavy bond supply, resilient economic growth, inflation risks, and expectations of prolonged high Fed rates. The increase in borrowing costs affects consumers through higher mortgage and auto loan rates, squeezes corporate investment particularly in capital-intensive sectors like AI, and raises federal interest expenses. Rising yields also tighten global financial conditions by strengthening the dollar and making it harder for emerging markets and lower-rated borrowers to refinance.

• The 10-year Treasury yield directly influences mortgage rates, reducing homebuyer purchasing power and discouraging existing homeowners from selling, which weighs on home sales and construction activity
• Corporate borrowing costs rise in tandem with Treasury yields, making capital-intensive projects like data centers and AI infrastructure less attractive, with particular concern for the tech sector issuing record debt
• Higher yields increase federal interest costs and create feedback risk where fiscal concerns push yields even higher, while also pulling global capital toward dollar assets and tightening financial conditions for emerging markets

Oil markets showed cautious trading on August 18, 2026, as geopolitical tensions escalated with Iran firing two ballistic missiles toward the UAE, both reportedly falling into the sea. WTI oil traded relatively flat near $84-86 while Brent oil remained stuck near $91, as traders grappled with conflicting signals about Iran-Oman negotiations over the Strait of Hormuz and uncertainty about whether supply disruptions will continue.

• Iran launched two ballistic missiles toward UAE that fell into the sea, while President Trump stated the U.S. has no scheduled talks with Iran and warned Oman against siding with Iran on Strait of Hormuz management
• WTI oil faces resistance at $86.00-$86.50 with support at $81.50-$82.00, while Brent oil struggles to break above $91.00-$91.50 resistance after rebounding from August lows
• Natural gas gained 3.07% and attempted to settle above $2.75-$2.80 resistance, supported by strong demand from hot weather despite high production levels

The Cooper Companies (COO) stock has surged 22.2% over the past three months, outperforming major indices, driven by strong Q2 results showing 8% revenue growth to a record $1.08 billion and 26% adjusted EPS growth to $1.21. The rally reflects strength in contact lens demand, particularly in myopia control, and recovery in fertility markets, though Asia-Pacific weakness and a strategic review of CooperSurgical introduce uncertainty.

• COO posted its 10th consecutive quarter of beating expectations with Q2 revenues reaching $1.08 billion and adjusted EPS of $1.21, up 26% year-over-year
• MiSight myopia-control product revenue jumped 24% to $32 million, while CooperSurgical's fertility business grew 10% organically to $144 million
• Asia-Pacific revenues declined 6% with weakness in Japan and China expected to persist through 2027, while forex headwinds, tariffs and freight costs are pressuring gross margins

U.S. Treasury yields have been surging since June, with the 30-year bond reaching its highest level since 2003, creating challenges as the government faces a nearly $40 trillion debt load. The increase is driven by fiscal concerns including a projected $2 trillion deficit, record corporate bond issuance related to AI investments competing with Treasurys, and investors demanding higher risk premiums.

• U.S. companies have issued nearly $1.7 trillion in bonds year-to-date, up 27% year-over-year and exceeding all of 2025, driven by AI investment needs
• The 30-year Treasury yield jumped more than 40 basis points since late June, with the public debt portion approaching 100% of GDP and the deficit likely reaching $2 trillion for fiscal year ending September 30
• Markets now see little chance of a Fed rate hike in September and assign low probability to increases until December, raising questions about the Fed's commitment to its 2% inflation target

Bitcoin is experiencing a summer lull with daily volumes around $4B on trusted exchanges, though the macro backdrop is improving with weaker US labor data and moderating inflation. Recent employment figures showed only 20,000 jobs added monthly over the last three months, while CPI moved closer to the Fed's target. This environment typically benefits Bitcoin through lower interest rate expectations, though initial price reactions were muted due to low liquidity.

• Weekly ETF flows show modest outflows of around $150M following prior week's inflows, with thin summer trading making flow data less reliable as a sentiment indicator
• Bitcoin has traded inversely to gold over the last five days, behaving more like a risk asset than a long-duration asset in current market conditions
• Rising Japanese government bond yields present a macro risk, as reduced Japanese demand for US Treasuries could increase US yield volatility and strengthen Bitcoin's case as a non-sovereign monetary asset

Bank of America is recommending investors shift to defensive assets despite market sentiment hitting its most bullish level since November 2021, with equity allocations at a net 56% overweight and cash positions falling to 3.5% of AUM. The bank's August Global Fund Manager Survey shows the third-most bullish reading since 2022, prompting contrarian investment advice favoring safer assets.

• Gold is the most favored defensive asset, with 16% of fund managers viewing it as undervalued—the highest reading since March 2023
• Survey shows extreme optimism with 56% expecting a no-landing scenario and 43% anticipating a boom, while 32% cite an AI bubble as the biggest tail risk
• Bank of America recommends long positions in gold paired with short commodities, overweight consumer staples versus technology stocks, and prefers U.K. equities over U.S. stocks

Long-term U.S. Treasury yields have climbed sharply, with the 10-year yield exceeding 4.7%, steepening the yield curve and raising consumer borrowing costs for mortgages, auto loans, and credit cards. The sell-off is driven by Iran war-related energy price pressures, AI infrastructure spending, and a 6.4% federal budget deficit, creating financial strain on Main Street while Wall Street prospers. Fed Chair Kevin Warsh will address markets at Jackson Hole on August 28, but the Fed cannot resolve fiscal imbalances alone.

• The spread between 2-year and 10-year Treasuries widened by nearly 29 basis points since June 24, with 30-year mortgage rates now at 6.75%, significantly impacting homebuyers and consumers.
• Diesel prices surged 48% year-over-year to $5.46 per gallon due to the Iran war limiting Middle East oil flows, while AI infrastructure demand competes with government bonds for investor capital.
• The U.S. budget deficit is projected at 6.4% of GDP for fiscal year 2026, with no clear deficit reduction plan from the Trump administration despite the mounting fiscal pressures driving bond market volatility.

The Nasdaq fell 1.77% on Tuesday as global bond yields surged to multidecade highs, with the 30-year Treasury reaching a 19-year high of 5.305%. Memory stocks that rallied Monday reversed sharply, with Western Digital and SanDisk each down over 8%, as rising long-term yields increased the cost of holding growth stocks despite unchanged AI demand fundamentals.

• The 30-year Treasury yield hit 5.305% (19-year high) while Japan, Germany, and France also saw long-bond yields reach multiyear or multidecade highs in the same session
• Memory semiconductor stocks reversed Monday's gains sharply: Western Digital down 7%, SanDisk down 8%, with Marvell and Seagate each off more than 8%
• The Nasdaq-100 futures tested the critical 50-day moving average at 29,513, with analyst warning that a break below this level could trigger acceleration toward 29,150

British AI company Quantexa is exploring a multibillion-dollar IPO in either the UK or US, though timing remains undecided. CEO Vishal Marria cited deeper capital pools and higher valuations in the US as advantages. A US listing would add to London's ongoing struggles with companies choosing American exchanges over the UK market.

• Quantexa has been 'IPO-ready' since January but has not committed to a timeline or decided between UK, US, or dual listing
• The company, founded in 2016, provides AI software for fraud detection and financial crime prevention to financial institutions, healthcare providers, and government agencies
• CEO noted the US offers a deeper pool of capital and potential for higher valuations compared to the UK market

A ship was attacked while exiting the Strait of Hormuz, resulting in one crew casualty, as President Trump claimed the waterway remains 'open and operating.' The incident is part of an ongoing U.S.-Iran conflict that has severely disrupted shipping through the critical oil transit route since late February.

• At least 17 mariners have been killed in 65 attacks on commercial vessels since the U.S.-Iran war began on February 28, according to the International Maritime Organization
• Ship traffic through Hormuz has collapsed to a five-day average of 10 crossings (lowest since May 11) compared to about 130 daily transits before the war
• Crude oil exports through Hormuz reached about 5 million barrels per day in July, up from 1.6 million bpd in May, but still well below the pre-war level of 20 million bpd (one-fifth of global oil consumption)

AI chip startup Etched raised $700 million in a funding round that valued the company at $21 billion, bringing its total funding to $1.9 billion. The company builds AI inference systems designed to make AI models faster and cheaper to run, targeting both public and private AI companies as well as cloud providers.

• The funding round was led by Jane Street with participation from major venture capital firms including Kleiner Perkins, Sequoia, Andreessen Horowitz, and Tiger Global
• Etched has secured more than $1 billion in customer contracts across public and private AI companies and cloud providers
• The company specializes in AI inference systems aimed at reducing the cost and increasing the speed of running AI models

Last week's inflation data (CPI and PPI) showed cooling price pressures, leading markets to push expectations for the next Fed rate hike out to early 2027. A spike in portfolio management fees within the PPI was largely ignored by markets because an upcoming BEA methodology change will significantly reduce this component's impact on inflation measurements.

• Headline PPI was unchanged month-over-month, with the year-over-year rate falling to 4.7% from 5.5%, building no case for a September Fed rate hike
• Portfolio management fees jumped 6.5%, but markets dismissed this increase as the BEA will stop tying these fees to assets under management and instead use wage growth starting September 30
• The BEA methodology change is estimated to lower measured core PCE inflation by roughly 0.2 percentage points when applied retroactively

US stocks opened lower on Tuesday, with the Dow falling 153 points, the S&P 500 down 0.56%, and the Nasdaq dropping 1.24%. The decline was driven by rising oil prices due to stalled US-Iran negotiations and elevated Treasury yields reaching multi-year highs. Technology and semiconductor stocks were particularly pressured as the 30-year Treasury yield climbed to 5.323%, levels not seen since 2007.

• US crude oil rose 0.93% to near $85/barrel and Brent gained 0.46% to three-week highs as US-Iran peace talks collapsed, with Iran threatening a 'fully offensive' posture and the US refusing to extend a ceasefire that expired August 17.
• The 30-year Treasury yield increased to 5.323% (highest since 2007) and the 10-year yield remained near January 2025 highs, weighing heavily on tech stocks with Nvidia and Tesla down over 1%, and semiconductor stocks (Micron, AMD, Intel) falling 3-5%.
• Money-market data shows traders pricing in a 96% probability of a 25-basis-point rate hike this year, with investors awaiting Wednesday's Fed July meeting minutes and next week's Nvidia earnings for further market direction.

A trader placed a $129 million bearish bet against semiconductor stocks through the VanEck Semiconductor ETF (SMH), representing the largest single options trade in the market on Monday. This massive contrarian position comes as the broader options market shows its most bullish sentiment toward chip stocks since April, with the put-to-call ratio falling to 1.89 from a June high of 3.5.

• The trade involved buying 20,100 puts at a 630 strike price expiring November 20, structured as a synthetic short position against the semiconductor sector with SMH trading at $594
• Implied volatility in semiconductor options collapsed from 65% last month to 40% on Monday (the lowest since February), making options relatively inexpensive and potentially motivating the large bearish bet
• The put-to-call ratio has historically been a compelling indicator for SMH price movements this year, reaching a bearish high on June 24 just before the fund entered a 25% drawdown

European Central Bank economists warn that AI-driven stock market valuations are likely to face a sharp correction, drawing parallels to past technological booms like railways, electricity, and the dot-com era. Even if current prices accurately reflect AI's transformative potential, historical patterns suggest investors will demand higher risk premiums as uncertainty spreads economy-wide, leading to a downturn.

• Two correction scenarios outlined: overoptimistic investors pushing prices beyond fundamentals, or justified valuations still declining as economy-wide uncertainty drives demand for higher risk premiums despite robust profit growth
• European retail investors face high exposure through prevalence of 'Magnificent 7' stocks in index and pension funds, potentially without their knowledge
• Unlike the dot-com crash, current economic conditions leave 'markedly less room to cut interest rates or use fiscal policy to cushion the fallout' from a market correction

Novig, a new prediction markets platform focused on sports event contracts, reported over $125 million in notional trading volume during its first week after launching on August 4. The platform's opening week volume exceeded that of competitors including Kalshi, Polymarket U.S., Underdog, and DraftKings' DKeX for sports contracts. Despite strong initial performance, Novig faces regulatory challenges, having filed lawsuits against multiple states and recently being denied a temporary restraining order against New York.

• Novig's highest single-day volume reached $26.3 million, with parlays representing one-third of overall trading and baseball markets dominating activity
• The CFTC approved Novig's designated contract markets application in June, allowing it to pivot from previous sweepstakes and sports-betting license models to prediction markets
• Novig is engaged in legal battles with five states (New York, Massachusetts, Washington, New Mexico, and Wisconsin) over whether sports event contracts qualify as gambling, with gaming attorney Daniel Wallach suggesting the platform's chances of winning 'are dim' based on recent court decisions favoring states

Goldman Sachs announced it will acquire commercial real estate investor LCN Capital Partners for up to $410 million, with $260 million paid upfront and up to $150 million tied to performance targets. The deal, expected to close by end of 2026, will be paid approximately 80% in stock and aims to expand Goldman's asset and wealth management offerings in commercial real estate.

• Goldman will pay $260 million upfront plus up to $150 million in performance-based earnouts, with roughly 80% of total consideration in stock
• LCN Capital Partners, founded in 2011, specializes in sale-leaseback and net-lease transactions in commercial real estate
• CEO David Solomon stated the acquisition provides clients with 'diversified sources of returns' and offers corporate clients 'innovative capital solutions'

US stock futures declined Tuesday morning as geopolitical tensions in the Middle East drove oil prices higher and rattled bond markets. President Trump threatened military action against Oman over the Strait of Hormuz and promised new sanctions on Iran, pushing Brent crude to $91 and WTI to $84 per barrel. The resulting inflation concerns sent the 30-year Treasury yield to a 19-year high of 5.31%.

• Nasdaq-100 futures fell 1% while S&P 500 dropped 0.4%, with oil prices reaching two-week highs amid Middle East tensions and US Strategic Petroleum Reserve at Reagan-era lows
• The 10-year Treasury yield climbed to 4.72% and the 30-year hit 5.31%, a 19-year high, driven by government borrowing and AI infrastructure funding demands
• Home Depot shares rose 1% pre-market as consumers favored smaller summer projects, providing modest relief amid broader market weakness

Nasdaq futures dropped over 300 points (down 1.17%) on Tuesday as the 30-year Treasury yield surged to a 19-year high and oil prices climbed above $90 per barrel. The selloff hit technology and semiconductor stocks hardest, with companies like Micron, AMD, and Intel falling 2.6% to 4.8% in premarket trading. Rising bond yields compress valuations for growth stocks while increasing financing costs for AI infrastructure investments.

• The 30-year Treasury yield hit its highest level since 2007, driven by heavy AI infrastructure borrowing, rising US deficits, and policy uncertainty, effectively tightening financial conditions without Fed action
• Brent crude topped $91 after US-Iran ceasefire talks failed, threatening to reverse recent inflation improvements through higher fuel and transport costs
• Home Depot beat Q2 estimates with sales of $47.86 billion (vs $47.27 billion expected) and comparable sales up 1.3%, providing an early positive signal on consumer spending ahead of Walmart's Thursday report