Major Indices Fall Amid Increased Borrowing Costs
U.S. stocks declined on Thursday, August 20, 2026, as higher Treasury yields persisted despite the Treasury Department’s planned debt repurchase operations. Market concerns centered on the potential for increased borrowing costs to negatively impact the ongoing bull market.
The three primary U.S. indexes finished the day in negative territory. The Dow Jones Industrial Average decreased by 703.84 points, representing a 1.32% loss, and closed at 52,759.21. The S&P 500 shed 0.87%, settling at 7,641.16. Meanwhile, the Nasdaq Composite dropped 1% to close at 26,067.17.
Treasury Yields Climb Despite Buyback Efforts
Bond yields advanced significantly on Thursday. This movement occurred even after the Treasury Department announced plans to at least double its repurchases of 10-, 20-, and 30-year government debt in the coming months. The yield on the 10-year Treasury note climbed past previous levels. Furthermore, Treasury Secretary Scott Bessent informed CNBC on Thursday that the debt buyback program might be even larger than the $4 billion initially reported.
The 10-year yield gained over 5 basis points, reaching 4.704%. The 30-year Treasury bond yield also rose by more than 5 basis points, hitting 5.248%. The 30-year yield reached its highest level in nearly two decades earlier in the week.
Regarding the effectiveness of the intervention, Adam Phillips, managing director of investments at EP Wealth Advisors, expressed skepticism. He stated:
This is not the cure to what ails the bond market. There are structural forces here at play that are really beyond the Treasury and the administration’s control, adding that the relief seen in the wake of past interventions has generally been short-lived. “You’re going to need to come at it with a little bit more force if it’s going to have staying power.”
Oil Prices and Geopolitical Risks Weigh on Equities
Global market pressures were compounded by rising oil prices and intensifying geopolitical tensions. Oil costs surged amid escalating friction between the United States and Iran. President Donald Trump had posted on Truth Social on Wednesday that the U.S. would initiate the “MOST CRUSHING ECONOMIC OPERATION EVER TAKEN AGAINST ANY COUNTRY!” He wrote, “This will be Economic Warfare and Isolation on an unprecedented scale.”
On the diplomatic front, Bessent told CNBC during a Thursday interview that the U.S. intended to impose the “toughest sanctions in history” on Iran. The commodity markets reflected these tensions: West Texas Intermediate (WTI) crude’s contract for October delivery increased nearly 3% to $86.83 per barrel. Meanwhile, global benchmark Brent crude futures gained more than 2%, reaching $93.78 a barrel.
Company-Specific Stock Movements
Walmart Shares Decline After Missing Guidance
The retail sector was negatively affected by Walmart, which experienced a significant decline. The company reported its worst trading day in more than four years after both its U.S. comparable sales and its adjusted earnings forecast for the full year missed the expectations of market analysts. The stock dropped almost 9% in early afternoon trading.
Deere Reports Strong Quarterly Profits
Deere & Co.’s stock jumped approximately 6% on Thursday after the agricultural and construction equipment manufacturer announced quarterly results that surpassed projections and subsequently raised the lower end of its full-year profit outlook. For the third quarter ending August 2, 2026, Deere posted a profit of $1.38 billion, an increase from the $1.29 billion recorded in the comparable period last year. Total worldwide net sales and revenues for the third quarter rose 5% to $12.6 billion. John C. May, the company’s chairman and CEO, stated that the company was “well positioned for long-term value creation.”
International and Asian Markets
Asian technology stocks showed resilience, with market sentiment supported by the U.S. market’s recovery. In South Korea, SK Hynix surged by over 12% following the announcement of a massive stock buyback plan, which involves accelerating a 40 trillion won ($28.7 billion) share repurchase and cancellation program. The company also committed to expanding its shareholder return to over 50% of cumulative free cash flow generated between 2025 and 2027.
Elsewhere, the Japanese Nikkei 225 closed 1.36% higher at 66,216.79, while South Korea’s Kospi rose 5.89% to 6,852.58. Hong Kong’s Hang Seng index was up 1.12% by its closing hour, and mainland China’s CSI 300 closed 0.1% higher at 4,592.375.
