U.S. Stocks Fall as Treasury Yields Surge; Bitcoin Tops $72K, Oil Prices Rally

Market Overview

U.S. equities moved lower across the board on Thursday. The Dow Jones Industrial Average fell 1.32% to close at 52,759, the S&P 500 declined 0.87% to 7,641, and the Nasdaq Composite lost 1.00% to finish at 26,067. The Nasdaq 100 posted its fifth consecutive session of losses, with Amazon falling roughly 2% and leading declines among mega-cap stocks.

Oil prices advanced sharply, with WTI crude gaining about 2.1% to $86.22 per barrel and Brent crude rising approximately 1.7% to $93.20. The move came amid escalating geopolitical tensions around the Strait of Hormuz and the UAEs suspension of trade with Iran.

Bitcoin climbed above $72,000 for the first time since early June, gaining roughly 5% on the day and about 15% since Monday. Ethereum has surged approximately 20% over the past two trading sessions.

Long-term U.S. Treasury yields moved higher. The 10-year yield rose about 4 basis points to 4.69%, while the 30-year yield climbed to around 5.24%, approaching a 20-year high. The U.S. Treasury stepped up its intervention at the long end of the curve by expanding its bond buyback operations.

On the corporate front, Walmart shares plunged more than 9% after second-quarter comparable-store sales growth slowed to 2.6%, the weakest pace in six years. Moderna fell 23%, giving back part of the previous sessions sharp rally. Alibaba reported a 9% year-over-year increase in second-quarter revenue, while annual recurring revenue from its AI products reached $49.5 billion.

Mainland Chinese equities edged higher, with the Shanghai Composite gaining 0.24% to 3,903.72 and the ChiNext Index rising 0.64%. China kept its Loan Prime Rates unchanged in August for the 15th consecutive month, while Shanghai lowered the minimum down payment requirement for second-home purchases outside the Outer Ring Road to 15%.

Key Themes to Watch

● Rising Oil Prices and the Strait of Hormuz

Both WTI and Brent crude moved higher as geopolitical tensions intensified around the Strait of Hormuz and the UAE suspended trade with Iran. Markets are focused not only on the immediate risk of supply disruptions, but also on the broader implications should shipping through this critical energy corridor be impaired.

Any prolonged disruption could push energy prices higher, lift inflation expectations, and reduce the policy flexibility available to major central banks. Going forward, developments in geopolitical negotiations and actual shipping data through the Strait will be critical in determining whether the latest oil rally is merely a short-term risk-premium spike or the beginning of a more sustained uptrend.

● Long-Term Treasury Yields and U.S. Equity Valuations

The 30-year U.S. Treasury yield has climbed to around 5.24%, approaching a 20-year high, while the 10-year yield has returned to 4.69%. Rising long-term rates continue to weigh on growth-stock valuations, with the Nasdaq 100 now down for five consecutive sessions.

The Treasury Departments expansion of its bond buyback operations suggests that investor attention is increasingly shifting away from monetary policy alone and toward fiscal dynamics and Treasury supply. Whether long-term yields can stabilize will be a key factor in determining the next phase of risk appetite in U.S. equities.

Key Events to Watch

• Japan July Consumer Price Index (CPI): Markets will assess the inflation trajectory and its implications for Bank of Japan policy and the Japanese yen.

• Global August Flash PMIs: Preliminary manufacturing and services PMI readings from the United States, eurozone, United Kingdom, and Japan will provide fresh signals on global demand conditions.

• China Fiscal Policy Briefing: Investors will watch for indications of the direction and scale of fiscal support in the second half of the year, as well as potential policy signals for credit conditions and the property market.

• Hang Seng Index Semiannual Review: Attention will focus on potential index additions and the subsequent flow of passive investment funds.

• Strait of Hormuz Developments: Following the sharp rise in oil prices, geopolitical developments in the region and their implications for energy markets and inflation expectations will remain in focus.