MARKET SNAPSHOT
U.S. stocks fell and Treasury yields hit multiyear highs after Yemeni rebels attacked Saudi Arabian energy facilities, pushing oil prices to their highest levels of the summer. Gold futures settled lower. The U.S. dollar weakened slightly.
MARKET WRAPS EQUITIES
U.S. stocks fell and Treasury yields hit multiyear highs after Yemeni rebels attacked Saudi Arabian energy facilities, pushing oil prices to their highest levels of the summer.
The Dow Jones Industrial Average fell 1.2%. The S&P 500 lost 0.6%, and the Nasdaq Composite slipped 0.3%.
The yield on the policy-sensitive two-year Treasury rose 0.017 percentage point to 4.396%, the highest close since January 2025. The yield on the 10-year Treasury rose 0.022 percentage point to 4.805%, an almost three-year high. The yield on the 30-year bond rose 0.018 percentage point to 5.264%, closing within 5 basis points of 19-year highs.
Markets in Asia ended mostly lower earlier Tuesday.
China's benchmark Shanghai Composite Index rose 0.2%, while the Shenzhen Composite Index declined 0.1% and the ChiNext Price Index fell 1.2%.
Hong Kong's Hang Seng Index closed 0.4% lower.
Japan's Nikkei Stock Average dropped 1.7%.
South Korea's Kospi declined 0.6%.
Australia's S&P/ASX 200 Index fell 1.0%, while New Zealand's S&P/NZX 50 Index dropped 1.1%.
COMMODITIES
Oil futures extended their gains as the Middle East conflict escalated with Houthi attacks on Saudi infrastructure and continuing strikes in the Strait of Hormuz.
In another sign of escalation, more U.S. Navy ships were attacked on Monday, The Wall Street Journal reported.
"It doesn't seem like President Trump has any kind of good off-ramp here. And it feels like the Iranians despite the blockade feel they're in a good negotiating position, and so it's hard to see things getting resolved quickly," said David Grumhaus, chief investment officer at Duff & Phelps Investment Management.
Also, with U.S. strategic oil reserves drawn down to low levels, those releases will have to be reduced, he added. "I think oil is likely to remain elevated."
WTI settled up 1.9% at $93.03 a barrel, a three-month high. Brent rose 0.9% to $97.92, its highest settlement since July 23.
Gold futures settled lower as the market watches escalation in the Middle East conflict while looking to this week's U.S. inflation data for clues on the Fed's possible interest-rate moves.
"The Fed is going to matter, but we saw a pretty good dollar rally from the middle of May to late June, and we've seen the dollar come off a fair amount since then," Grumhaus said. "That has helped with gold this time around."
An uptick in ETF flows into gold has also supported the metal, he added.
Front-month gold settled down 0.8% in New York at $4,393.90 a troy ounce. Silver rose 0.4% to $66.297 a troy ounce.
TODAY'S TOP HEADLINES
Iran Launched Undisclosed Second Wave of Attacks on U.S. Navy Ships
Iran launched an attack against U.S. Navy ships on Monday that the U.S. military has yet to acknowledge, according to U.S. officials, after firing ballistic missiles at an aircraft carrier and a guided-missile destroyer over the weekend.
No American ships were struck in the attacks, but Iran's recent attempts to hit American naval assets are raising alarm that its military is using more sophisticated weapons and could be getting assistance from China or Russia, according to the officials.
The attacks highlight Iran's willingness to go on the offensive as the U.S. blockade of Iranian ports weighs on the country's economy. They also risk escalating the conflict, since the U.S. has promised to take action against such attacks.
Yemen's Houthi Militants Attack Saudi Energy Infrastructure
Iran-backed Houthi militants in Yemen fired drones and missiles at a number of Saudi Arabia's southern energy facilities Tuesday morning, escalating the fighting on what has become a second front for the kingdom and sending oil prices back toward $100 a barrel.
Saudi Arabia confirmed the attacks, which the Houthis said targeted facilities in Abha, Najran and Jazan. The strikes hit gas and oil storage facilities including at a power plant in Abha and left the major refinery at Jazan aflame and off line, people familiar with the damage said. Output at Jazan had already been diminished by previous Houthi strikes.
Saudi Aramco, the country's majority state-owned oil company, didn't immediately respond to a request for comment.
Ford's Use of Chinese Tech Called 'Unacceptable' by Transportation Secretary
Transportation Secretary Sean Duffy sharply criticized Ford Motor's business with Chinese automotive firms, saying the company's "reliance on technologies of foreign adversaries" isn't sustainable for America.
"While DOT recognizes the intense competitive pressures of the global market, the company's recent strategic decisions paint a troubling picture of a foundational American brand actively intertwining its future with Chinese state-backed enterprises," Duffy said in a letter to Ford Chief Executive Jim Farley made public Tuesday.
Duffy also called the manufacturing of Lincoln vehicles in China for the U.S. market "unacceptable." While Ford has said it would re-shore production of those vehicles starting in 2030, Duffy said the years in between represent a "multi-year window of reliance on Chinese manufacturing while depriving skilled American workers of vital manufacturing jobs."
Meta Launches a Personal AI Agent Designed to Be Easy to Use
Meta Platforms is betting that making AI agents easy to use will get mainstream consumers to start adopting them in their daily lives.
The company on Tuesday announced a new personal AI agent that can buy goods online, respond to emails and complete other tasks users authorize it to do for them. The agent, called Muse, is accessible via a dedicated app. Users operate the agent by conversing with it like a typical chatbot and can choose their own names for it.
The new tool is Meta's latest attempt to monetize its massive AI investments, which are expected to top $130 billion this year. The AI agent is free to access for "most of what people need" and has two tiers of subscription plans for power users: one for $20 a month and another for $100 a month, Meta said.
Amazon Sued for Allegedly Discriminating Against Pregnant Employees
A group of former Amazon.com warehouse employees is suing the company, alleging they were illegally punished and eventually terminated for seeking accommodations related to their pregnancies.
The class-action, led by four ex-warehouse workers, alleges that Amazon deducted their bank of unpaid time off or flagged them for "time off-task" for medically necessary breaks or absences.
One plaintiff was flagged for excessive time off-task for pumping in the company's lactation room, the lawsuit said.
GE Aerospace to Buy Consolidated Precision Products for $11.75 Billion
GE Aerospace agreed to buy metal-castings provider Consolidated Precision Products for $11.75 billion, placing a large bet on the advanced materials needed to keep its advanced engines cool.
The engine maker said its purchase from private investment firms Warburg Pincus and Berkshire Partners will help the Evendale, Ohio, company meet surging demand for its engines. About 60% of the CPP's revenue came from commercial aerospace customers, with the remainder from defense, power and other markets.
GE Aerospace said it plans to fund the acquisition, slated to close in the second half of 2027, with $7 billion in cash on hand and the remainder in new debt, adding that the deal doesn't change its capital-allocation plans.
Qualcomm Stock Pops as Amazon Deal Ramps Up AI Ambitions
Qualcomm needed some big news to stop its recent stock slide. So it's handy that the chip maker has landed a deal with Amazon that could be worth as much as $60 billion.
Qualcomm shares were popping on Tuesday after the chip maker said it would work with Amazon across multiple generations of custom chips to support Amazon Web Services' artificial-intelligence infrastructure. Additionally, the companies are working together on optical networking.
Shares of Qualcomm rose 4.2% to $175.74 in Tuesday trading. Amazon stock was 0.6% lower. The S&P 500 slid 0.3% as investors fretted about rising oil prices.
Expected Major Events for Wednesday 01:30/CHN: Aug CPI
01:30/CHN: Aug PPI
03:00/SKA: Aug Economic Trends, including household loans, money supply index Lf
04:01/MAL: Jul Industrial Production Index
04:01/MAL: Jul Manufacturing sales
06:00/JPN: Aug Preliminary Machine Tool Orders
08:00/TAI: Aug Merchandise trade
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