US Markets Slip as Bond Yields Rebound, Walmart Slumps 9% on Slowing Sales; Oil Hits $94 on Trump's Iran Threat

Mumbai, Aug 20: US stock markets opened lower on Thursday as a rebound in government bond yields erased Wednesday’s relief rally, while retail giant Walmart’s disappointing comparable sales growth and weak guidance weighed heavily on investor sentiment. The Dow Jones Industrial Average fell 0.6%, while the S&P 500 slipped 0.3%, and the tech-heavy Nasdaq Composite declined 0.5% in early trading. 

The market’s pullback came after the Treasury Department’s surprise announcement on Wednesday to double its buyback of long-term government bonds had briefly calmed bond markets, sending yields lower and helping all three major indexes snap three-session losing streaks.  

However, that respite proved short-lived as yields climbed back on Thursday amid persistent concerns over the ballooning US national debt, which has now surpassed $40 trillion, and escalating geopolitical tensions with Iran that pushed oil prices to three-week highs. 

Dow Jones Industrial Average Drops 333 Points as Walmart Plunges 9% 

The Dow Jones Industrial Average fell 333.69 points, or 0.62%, to 53,129.36 in early trading after opening at 53,381.22. Walmart led declines, plunging 8.72% to $104.33 after US comparable sales growth of 2.6% missed the 3.7% forecast. Home Depot fell 2.72%, American Express declined 1.96%, and Merck dropped 1.83%.  

Also Read: What Is the New York Stock Exchange (NYSE)?  

On the positive side, Disney gained 1.39%, Chevron rose 0.90% on higher oil prices, and McDonald’s advanced 0.87%. Nvidia and Apple added 0.77% and 0.42%, respectively. Walmart’s weak results and soft third-quarter guidance weighed heavily on the index, raising concerns about consumer spending resilience. 

S&P 500 Slips 17 Points as Energy Gains Offset Tech Weakness 

The S&P 500 declined 17.21 points, or 0.22%, to 7,690.77 in early trading after opening at 7,690.49. Energy stocks gained as oil prices surged, with Exxon Mobil rising 1.86% and Chevron advancing 0.90%. Deere & Company jumped 3.31% after strong earnings, while Linde gained 1.42%. However, broader weakness in consumer discretionary and healthcare stocks weighed on the index.  

Walmart plunged 8.74%, Moderna tumbled 17.91% after its previous-day surge, and Advance Auto Parts sank 21.01% following disappointing results. Tesla and Home Depot also declined. Meanwhile, the Philadelphia Fed manufacturing index surged to 47.4 in August, its highest since April 2021. 

Nasdaq Composite Declines 94 Points as Tech Stocks Underperform 

The Nasdaq Composite fell 94.19 points, or 0.36%, to 26,236.90 in early trading after opening at 26,211.52. Tesla led Magnificent Seven decliners, dropping 2.09% after gaining more than 4% on Wednesday, while Amazon, Alphabet and Microsoft also declined. Apple and Nvidia provided support, rising 0.42% and 0.77%, respectively.  

Semiconductor stocks were mixed, with Micron Technology gaining 0.96% after announcing a $10 billion research investment, while Broadcom and AMD advanced. Intel fell 1.24%. Meanwhile, Moderna plunged 17.91%, weighing on healthcare stocks. Cryptocurrency-related shares surged as Bitcoin crossed $71,000, with Coinbase, Strategy and MARA Holdings gaining 6.90%, 7.16% and 8.96%, respectively.. 

Russell 2000 Declines 20 Points as Small-Caps Underperform 

The Russell 2000 fell 20.74 points, or 0.68%, to 3,012.20 in early trading after opening at 3,019.30. Hims & Hers Health gained 5.47%, while SM Energy rose 4.72% and Webull Corporation surged 11.28%. Bitcoin-related stocks also advanced, with MARA Holdings gaining 8.96% and Strategy rising 7.16%, while oil-linked names benefited from higher crude prices.  

Also Read: How to invest in US stocks 

However, Advance Auto Parts plunged 21.01%, leading decliners, while Moderna fell 17.91% and BETA declined 4.13%. ERAS, CRSP, IBRX and COF also fell. The index underperformed amid concerns over higher borrowing costs, rising input expenses and pressure on consumer spending. 

S&P 100 Drops 11 Points as Tech and Consumer Stocks Decline 

The S&P 100 Index fell 10.75 points, or 0.28%, to 3,789.80 in early trading after opening at 3,793.02. Apple rose 0.42%, while Nvidia and Broadcom gained 0.63% and 1.05%, respectively, providing some support. However, Walmart plunged 8.74%, Home Depot declined 2.82%, and Tesla fell 2.09%, weighing on the index. Amazon and Microsoft also slipped.  

Healthcare stocks were mixed, with Merck, Amgen and Eli Lilly declining 1.83%, 1.38% and 1.14%, respectively. Energy stocks outperformed as Exxon Mobil gained 1.86% and Chevron advanced 0.90% amid higher oil prices and geopolitical tensions. 

Dow Transports, Utilities, and Composite Average Show Mixed Performance 

The Dow Jones Transportation Average fell 141.44 points, or 0.66%, to 21,319.40 in early trading, pressured by higher oil prices and concerns over rising fuel and operating costs for airlines and freight companies. The Dow Jones Utility Average, however, gained 3.09 points, or 0.28%, to 1,112.96 as investors favoured defensive, dividend-paying stocks amid elevated bond yields and economic uncertainty.  

Meanwhile, the NYSE Composite Index declined 79.42 points, or 0.32%, to 24,627.85. Despite the broader weakness, the index remained close to its 52-week high of 24,866.75, indicating relative resilience compared with other major market indices. 

PHLX Semiconductor Index Slips 30 Points Despite Strong AI Demand 

The Philadelphia Semiconductor Index fell 30.31 points, or 0.26%, to 11,707.91 in early trading, reflecting mixed performance across chipmakers. Micron Technology gained 0.96% after announcing plans to invest $10 billion in a Boise research lab over the next decade, while Broadcom, Lam Research and AMD also advanced. Seagate Technology rose 1.12%, and Western Digital gained 0.62%.  

Also Read: Understanding Dow Jones Industrial Average (DJIA) – A Complete Guide 

However, Intel declined 1.24%, Palantir fell 1.02%, and CrowdStrike dropped 2.38%, while Palo Alto Networks and ON Semiconductor also slipped. The mixed performance came despite strong AI-chip demand, with Morgan Stanley identifying Nvidia as an under-owned mega-cap stock with potential for increased institutional demand. 

S&P MidCap 400 and SmallCap 600 Decline on Consumer Weakness 

The S&P 400 MidCap Index fell 19.07 points, or 0.50%, to 3,824.92 in early trading, opening at 3,843.99 after Wednesday’s close. The index traded between 3,822.91 and 3,843.99, reflecting moderate declines across mid-cap stocks. 

The S&P 600 SmallCap Index declined 8.90 points, or 0.50%, to 1,788.32, opening at 1,791.75 after Wednesday’s close of 1,797.22. The index traded between 1,784.80 and 1,791.75, reflecting similar weakness across small-cap stocks. 

Mid-cap and small-cap indices underperformed relative to large-cap benchmarks, reflecting concerns about smaller companies’ exposure to rising input costs, higher borrowing costs, and consumer spending pressures. Energy stocks provided some support, but broad-based weakness across consumer discretionary and healthcare sectors weighed heavily on the indices. 

Bond Yields Rise as US Debt Surpasses $40 Trillion 

US Treasury yields resumed their climb, with the 10-year yield rising 5 basis points to 4.696% and the 30-year yield gaining 4 basis points to 5.236% in early trading. The 2-year yield added 2 basis points to 4.196%, reflecting persistent inflation concerns and uncertainty over the Federal Reserve’s policy path. The rise followed a brief decline in long-term yields after Treasury Secretary Scott Bessent announced that the government would at least double purchases of 10-, 20- and 30-year debt from September 9 to November 4. 

The rebound came as US national debt crossed $40 trillion, having more than doubled in less than a decade. The growing fiscal burden has raised concerns about the sustainability of government borrowing, particularly amid a large budget deficit and rising defence spending. Michael Schumacher, former head of macro at Wells Fargo, said long-term rates could continue to rise because of these pressures. The yield curve has also steepened in recent weeks, reflecting expectations of higher long-term borrowing costs despite concerns about the economic outlook. 

Brent Crude Rises Above $93 as Iran Tensions Escalate 

Brent crude futures for October delivery rose 2.39% to $93.81 a barrel, while September WTI futures gained 2.34% to $88.16. The more active October WTI contract advanced 2.89% to $86.83 as geopolitical tensions increased concerns over global oil supplies. 

Also Read: US Stock Market Timings 

The gains followed President Donald Trump’s threat of an “Economic D-Day” against Iran, describing the measures as economic warfare and unprecedented isolation. The UAE also announced a suspension of trade with Tehran, while talks to reopen the Strait of Hormuz remained stalled. The developments pushed oil prices to more than three-week highs, with markets increasingly pricing in the possibility of prolonged supply disruptions from the Middle East. 

Gold futures slipped 0.3% to around $4,530 an ounce after rising 4% in the previous session. The decline reflected profit-taking, although gold remained near record highs amid geopolitical uncertainty, inflation concerns and dollar weakness. 

Bitcoin Surges Above $71,000 on Clarity Act Hopes 

Bitcoin jumped 10.32% to $71,666.51, crossing $70,000 for the first time since June. Ethereum also climbed 3.3% to its highest level in more than three months, while Solana reached levels last seen on May 16. 

The rally followed President Trump’s meeting with executives from Coinbase, Payward and Blockchain.com at the White House, where industry leaders pushed for the passage of the Clarity Act, a cryptocurrency market-structure bill. Expectations of greater regulatory clarity boosted digital assets. Around $1 billion in short positions were liquidated, marking the biggest short squeeze since 2021. 

Crypto-related stocks also advanced sharply. Coinbase Global rose 6.90%, Strategy gained 7.16%, and MARA Holdings climbed 8.96%, while Robinhood Markets and Circle Internet also moved higher. 

US Jobless Claims Fall to 206,000 as Labour Market Remains Resilient 

Initial jobless claims for the week ended August 15 fell by 6,000 to 206,000, below economists’ estimate of 210,000. The four-week moving average rose slightly to 204,000, while continuing claims declined to 1.83 million for the week ended August 1. 

The figures point to a broadly stable labour market, characterised by low hiring and low layoffs. The resilience gives the Federal Reserve room to maintain a restrictive policy stance if inflation remains elevated. 

Meanwhile, the Philadelphia Fed’s manufacturing index jumped six points to 47.4 in August, well above the Dow Jones estimate of 25 and its highest reading since April 2021. The employment index surged to 27.9, its highest since April 2022, signalling stronger factory activity and labour demand. 

Sector Performance Shows Energy Gains as Consumer Discretionary Weakens 

Energy led the S&P 500, with Exxon Mobil gaining 1.86% and Chevron rising 0.90% as oil prices climbed amid geopolitical tensions. Consumer Discretionary was the weakest sector, led by Walmart’s 8.74% decline, followed by Home Depot and Tesla. Information Technology was mixed, with Nvidia and Apple advancing while Microsoft and Intel declined.  

Also Read: What Is the S&P 500? A Simple Guide for Everyday Investors 

Healthcare underperformed as Moderna fell 17.91% after its sharp previous-session surge, while Merck and Amgen also declined. Financials slipped amid higher bond yields, with JPMorgan, Bank of America and Morgan Stanley falling. Consumer Staples remained mixed, with Coca-Cola and Procter & Gamble posting modest gains.. 

Biggest Gainers and Losers: Webull Surges 11% as Advance Auto Parts Plunges 21% 

Webull Corporation surged 11.28% to $9.61, leading gainers as fintech and cryptocurrency stocks benefited from Bitcoin’s rally above $71,000. Engie Brasil Energia climbed 10.20%, Tempus AI rose 9.68%, Bitdeer Technologies gained 9.46%, and Twenty One Capital advanced 8.38%. Coinbase Global, Strategy and MARA Holdings also rose sharply, gaining 6.90%, 7.16% and 8.96%, respectively. Hims & Hers Health advanced 5.47%, while energy stocks SM Energy and Murphy Oil gained 4.72% and 4.15%. 

On the losing side, Advance Auto Parts plunged 21.01% to $44.38 after disappointing quarterly results. Moderna tumbled 17.91% following its previous-session 175% surge, while Walmart fell 8.72% after missing comparable sales expectations and issuing soft guidance. Kingsoft Cloud dropped 9.22%, ArcelorMittal declined 6.83%, and SharonAI Holdings fell 8.03%. Tesla slipped 2.09%, while Home Depot and Amazon declined 2.82% and 0.76%, respectively. 

Fed Minutes Show Growing Inflation Concerns and Rate Hike Support 

Federal Reserve minutes from the July meeting showed growing concern over persistent inflation, with several policymakers supporting a potential interest-rate increase if price pressures fail to ease towards the 2% target. The Federal Open Market Committee kept the benchmark rate unchanged at 3.5%-3.75%, while three officials dissented in favour of a 25-basis-point hike.  

The minutes highlighted growing unease over inflation remaining above target for more than five years, with higher oil prices posing additional risks. Fed Chair Kevin Warsh is also considering reducing the number of annual policy meetings from eight to six. 

US Dollar Index Declines as Bitcoin and Oil Surge 

The US dollar index fell 0.1% to 98.74 in early trading despite higher Treasury yields, as investors shifted towards commodities and cryptocurrencies amid geopolitical uncertainty. Gold futures declined 0.3% to around $4,530 an ounce after a 4% previous-session gain, while silver and copper also edged lower. Natural gas futures dropped 1.9% to $2.76 per million British thermal units as traders booked profits ahead of the weekly US storage report. Meanwhile, European natural gas prices rose to €65 per megawatt-hour, their highest since March, amid tighter supplies and heightened geopolitical risks. 

The convergence of rising bond yields, elevated oil prices, and geopolitical uncertainty creates a complex market environment. Walmart’s sales miss underscores the impact of inflation on consumer spending patterns, while the Treasury’s bond buyback programme reflects growing concerns about government debt sustainability. Market participants should monitor oil price movements and Treasury yield trends as key indicators of inflation expectations and policy responses. The Federal Reserve’s policy trajectory remains data-dependent, with labour market resilience providing room for continued vigilance against inflation.

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