The three major New York stock indexes opened lower on the 18th. Yields on U.S. Government Bonds have risen day after day, with the 30-year yield hitting a record high since 2007, which appears to be weighing on stocks.
As of 10:37 a.m., on the New York Stock Exchange (NYSE), the Dow Jones Industrial Average was down 66.12 points, or 0.12%, at 53,393.66.
The Standard & Poor's (S&P) 500 index fell 38.36 points, or 0.50%, to 7,706.70, and the tech-heavy Nasdaq composite was down 286.73 points, or 1.08%, at 26,358.18.
The market weakness appears to be due to risk-off sentiment from rising U.S. Government Bonds yields. In particular, the U.S. 30-year Government Bonds yield was in the 5.3% range, the highest level since 2007. The 10-year yield also moved around 4.7%, at one point hitting a record high since last year.
Some analysts said the rise in Government Bonds yields stems from inflation pressure due to higher oil prices as peace talks between the United States and Iran have stalled. The United States and Iran set a 60-day deadline in June and began peace talks, but produced no notable results by the deadline on the 17th.
With no agreement reached, the likelihood of a prolonged Iran war has grown. U.S. President Donald Trump said he would not extend a temporary deal, and Iran has maintained that it will intensify its offensive if discussions continue to stall.
By stock, semiconductor names were notably weak. Micron Technology was down 7.58% from the previous session, SanDisk 9.19%, Nvidia 2.56%, and SK hynix ADR 8.45%.
Big Tech stocks were mixed. Meta was down 2.87%, while some names posted small gains, with Apple up 1.7% and Microsoft up 0.3%.
Market participants are watching the Federal Reserve's minutes from the July Federal Open Market Committee (FOMC), to be released on the 19th. The minutes are expected to show the views of Fed members on inflation and the economy and the pressure to raise rates.
Oil prices were also rising on the prospect of a prolonged Iran war. On the day, West Texas Intermediate (WTI) for September delivery rose 0.3% from the previous session to $84.8 a barrel.