U.S. STOCKS OPEN LOWER AS IRAN STALEMATE LIFTS OIL AND YIELDS

Developing story: Stock indexes, oil prices, Treasury yields and Federal Reserve expectations may change through the trading session.

U.S. stocks opened lower Tuesday as fading hopes for a U.S.-Iran peace deal lifted oil prices and pushed bond yields higher, checking risk appetite after a volatile stretch of market optimism tied to artificial intelligence and softer economic data. Reuters reported that the S&P 500 and Nasdaq opened lower as investors reacted to the Iran stalemate.

The market move reflects a collision between two forces. Softer U.S. data had reduced expectations for another Federal Reserve rate increase, which would normally support stocks. But higher oil prices and rising long-term yields point to renewed inflation and financing pressure, making investors less willing to pay high valuations for future growth.

Oil was the immediate driver. Brent crude traded above $91 as the Strait of Hormuz remained disrupted and Iran said the waterway would stay closed unless the United States meets its conditions. Higher oil can support energy shares, but it raises costs for consumers and businesses and can revive inflation expectations.

Bond yields added pressure. U.S. 30-year Treasury yields rose to their highest level since 2007, according to Reuters. Higher long-term yields make equities less attractive by increasing the return available from bonds and raising the discount rate applied to future earnings, especially for technology companies.

The timing is difficult for policymakers. Markets are reducing the probability of near-term Fed tightening because consumer and housing data have weakened. At the same time, an oil shock can push inflation higher even if growth is slowing, leaving the central bank with less room to reassure investors.

Technology stocks remain central to the broader market. Investors are still buying into the AI infrastructure boom, but large commitments by Nvidia, OpenAI, cloud firms and data-center developers have also raised concerns about financing, power constraints and returns. A yield shock makes those long-duration investments more sensitive.

Retail earnings and housing data add another read on the consumer. Home Depot reported better-than-expected results on repair demand, while U.S. single-family housing starts fell sharply in July. That mix suggests consumers are still spending on maintenance but remain cautious about bigger-ticket home projects in a high-rate environment.

What is confirmed is that U.S. stocks opened lower as oil and bond yields rose on the Iran stalemate. What remains unresolved is whether the decline becomes a short-term geopolitical repricing or a broader correction driven by energy inflation, high long-term yields and questions about AI and consumer demand.

Fact-check date: August 18, 2026. Article type: News. Sources: Reuters; U.S. Census Bureau. Developing note: Stock indexes, oil prices, Treasury yields and Federal Reserve expectations may change through the trading session.