U.S. stock indexes closed lower on August 18 (S&P500: -0,69%) amid a sell-off in semiconductor stocks, against a backdrop of uncertainty in the Middle East and bond yields rising to multi-year highs.
The technology sector was at the epicenter of the decline, while the PHLX Semiconductor Index gave back all of yesterday’s gain—and more. Shares of memory makers were among the laggards after Monday’s rally, and selling in optical and electronic equipment manufacturers added to the pressure.
Persistently high borrowing costs remained another headwind for growth stocks, even as long-term Treasury yields pulled back from nearly two-decade highs after the session opened. The interest-rate environment is also particularly relevant for the housing market after today’s economic data showed a sharp drop in new housing starts in July and a larger-than-expected decline in pending home sales.
The U.S. dollar remained stable, as expectations of a Fed “dovish” stance were offset by the ongoing impasse in relations between Washington and Tehran in the Middle East. The euro also remains near the $1,157 level.
Oil prices continued to rise after U.S. President Trump said that no talks with Iran are taking place or planned, and that the Strait of Hormuz is open and functioning. At the same time, the market is assessing conflicting reports on how much oil passes through the Strait of Hormuz. U.S. government data indicate that significantly more oil is leaving the region than vessel-tracking data show. WTI crude futures closed at $84,94 per barrel (+0,5%).