US stocks finished Tuesday firmly in the red, with all three major benchmarks closing lower as rising oil prices added to investor concerns. The selloff was compounded by a recent uptick in Treasury yields, with the 10-year note having climbed to its highest level since November 2023 last week, while the 2-year yield touched a fresh high not seen since January 2025.
The Dow Jones Industrial Average suffered its steepest decline, shedding 626.72 points, or 1.17%, to close at 52,787.53. The S&P 500 fell 44.98 points, or 0.58%, to settle at 7,673.62, while the tech-heavy Nasdaq Composite dropped 85.58 points, or 0.32%, to finish the session at 26,421.41.
In individual stock action, chip stocks delivered a mixed performance. Nvidia (NVDA.US) slid 2%, while Qualcomm (QCOM.US) gained 3% and Intel (INTC.US) surged 9%. Notably, SK hynix (SKHY.US) advanced 4.8% amid continued strength in the memory chip sector. The Nasdaq Golden Dragon China Index fell 1.7%, with iQiyi (IQ.US) bucking the trend to soar nearly 12%.
European markets showed little direction
European equities closed mixed on Tuesday. Germany's DAX 30 edged up 26.10 points, or 0.10%, to 26,007.89, while France's CAC 40 rose 11.83 points, or 0.14%, to 8,317.98. The UK's FTSE 100 slipped 5.80 points, or 0.05%, to 10,816.33. The Euro Stoxx 50 added 9.16 points, or 0.14%, to 6,413.15, while Spain's IBEX 35 fell 40.26 points, or 0.20%, to 19,981.54 and Italy's FTSE MIB declined 43.07 points, or 0.08%, to 52,186.50.
Asian benchmarks and currency moves
In Asia, Japan's Nikkei 225 dropped 1.7%, while South Korea's KOSPI composite index fell 0.58%. The US dollar index, which measures the greenback against six major peers, slipped 0.13% to settle at 98.787 in late trading. The euro strengthened to $1.1629 from $1.1624, and the pound rose to $1.3547 from $1.3542. Against the yen, the dollar weakened to 153.61 from 154.34, and it also fell against the Swiss franc, Canadian dollar, and Swedish krona.
Commodities and crypto
Bitcoin dipped 0.52% to $78,514, while Ethereum held steady at $2,482. In the energy sector, West Texas Intermediate crude for October delivery climbed $1.55, or 1.69%, to settle at $93.03 per barrel, and Brent crude for November delivery rose 92 cents, or 0.95%, to $97.92 per barrel. In precious metals, spot gold was quoted at $4,355.59 per ounce, and spot silver stood at $65.763 per ounce.
Oil supply concerns drive prices higher
Oil prices advanced after Saudi Arabia's energy ministry reported that multiple energy facilities and utilities had been attacked by Yemen's Houthi rebels, causing fires at several sites and temporarily disrupting operations at some installations. The incident reignited supply concerns in an already tight market.
Iran reportedly strikes US Navy vessels again
Iran launched another attack on US Navy ships on Monday, marking the second such action against American maritime assets in three days, according to US officials cited by media reports. The Pentagon has yet to officially acknowledge the latest assault. Officials suggested the recent Iranian actions may indicate the deployment of more advanced missiles, noting that Tehran claims to have used new precision-guided munitions against US vessels. Analysts believe some Iranian missiles are equipped with electro-optical seekers capable of image recognition and tracking moving targets. Washington has already struck three Iranian oil tankers in response to earlier attacks on US ships. While the US hopes sanctions and blockades will pressure Tehran into concessions, officials say the threat to American naval assets is intensifying.
Wall Street eyes Bessent's buyback scale
Treasury Secretary Bessent is set to unveil the next round of long-dated Treasury buybacks, with Wall Street closely watching whether the operation will be expanded and what signal it sends about debt management policy. Wrightson ICAP senior economist Lou Crandall suggested a buyback of $5 billion to $6 billion would be reasonable, though larger operations remain possible. Morgan Stanley analysts noted that funding constraints could cap individual buybacks at around $10 billion, and reaching that level could reduce quarterly net issuance of Treasuries with maturities over 20 years by roughly 55%. Bloomberg strategist Ira Fegen said that if the buyback comes in above expectations, the market may interpret it as a stronger policy signal from the Treasury, potentially pushing long-term yields lower in the short term, though the scale remains limited relative to the overall Treasury market. Barclays strategists Pradhan and Hu expect the Treasury may adopt open-ended language such as "at least $4 billion per operation" to retain flexibility. Market participants will now focus on buyback size, frequency, and forward guidance, with the 30-year swap spread likely to offer the most direct reflection of supply expectations.
NY Fed survey: 1-year inflation expectations ease slightly
The New York Federal Reserve's Microeconomic Data Center released its August consumer expectations survey on Tuesday, revealing a modest decline in medium-term household inflation expectations while short- and long-term readings held steady. Expectations for gasoline price growth rose again in August. Labor market expectations were mixed: unemployment and job-loss expectations deteriorated, while job-finding and quit expectations improved. The expected probability of a higher unemployment rate reached its highest level since April 2020. The survey was conducted from August 3 to 31.
On inflation, the 1-year expectation eased to 3.58% from 3.63%, while the median expected home price growth declined 0.2 percentage points to 3.0%, driven by respondents in the Northeast. For commodities, 1-year gasoline price expectations rose 1.7 percentage points to 4.6%, food costs gained 0.3 points to 5.3%, and medical care increased 0.2 points to 9.1%. College education costs rose 0.3 points to 6.1%, and rent expectations climbed 0.7 points to 6.6%. On the labor front, median 1-year income growth expectations ticked up 0.1 points to 2.9%, while the average expected probability of a higher unemployment rate jumped 1.6 points to 44.4%, the highest since April 2020, with increases across all age, education, and income groups.
Trump threatens to bar Canada from GSA procurement
President Trump stated on social media that Canada has long restricted American agricultural products and businesses from entering its market while still enjoying access to US government procurement opportunities, calling the arrangement "not trade reciprocity." Trump said he has directed the General Services Administration (GSA) and the US Trade Representative (USTR) to take steps to remove Canadian-origin products from multiple GSA procurement programs unless Canada restores "full and fair reciprocal treatment" for American farmers and businesses. The procurement programs in question exceed $50 billion in scale. Trump argued that Canadian federal and provincial governments limit US small businesses' participation in their procurement markets, yet Canadian firms can access the vast US government procurement market, adding that the US will adopt a policy of "no reciprocity, no access."
Google-Blackstone data center project reportedly delayed
Google parent Alphabet (GOOG.US) has encountered delays in "Project Braid," its AI cloud initiative with Blackstone (BX.US), according to people familiar with the matter. The project, backed by $5 billion from Blackstone, aims to rent out computing resources powered by Google's AI chips to customers starting in 2027. Sources said Google had originally planned for AI data center developer Crusoe to build a facility in Cheyenne, Wyoming, but later cancelled that arrangement and took over the project, requiring new permit applications. The people said Google lost confidence in Crusoe's ability to deliver the project on schedule. Crusoe had previously gained attention for its involvement in the flagship "Stargate" data center project being built in Texas for OpenAI and Oracle. Additionally, another data center site has been affected by a shortage of required transformers. The AI data center sector is currently facing bottlenecks including inadequate power equipment supply and permitting delays. A Project Braid spokesperson said the project remains on track, with plans to deliver 500 megawatts of computing capacity next year.
Meta launches personal AI agent 'Muse'
Meta Platforms (META.US) has unveiled Muse, a personal AI agent application designed to handle digital tasks such as booking appointments, filling out spreadsheets, and monitoring home security cameras. Meta's head of AI, Alexander Wang, said Muse is powered by the company's Muse Spark family of foundation models and will be available in a free tier alongside subscription options priced at $20 and $100 per month. Wang emphasized that Muse operates within a secure, isolated environment on Meta's computing infrastructure, does not access users' actual passwords or payment information, and will request confirmation before executing sensitive actions. Users can choose whether to allow Meta to use their interactions with Muse to train AI models; those who opt in will have key personally identifiable information removed before the data is used for model improvement. The launch comes as Meta faces scrutiny over AI safety, privacy concerns, and pressure to demonstrate returns on its AI investments. CEO Mark Zuckerberg has previously stated that personal AI agents represent a key direction for the company's future products and revenue growth. Meta also indicated it is exploring commercial models related to AI agent shopping transactions.
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