U.S. stocks fall as rising bond yields, oil prices spook investors

Aug. 18 (UPI) — Stocks fell on all three major U.S. indices Tuesday as investors were spooked by elevated bond yields and the prospect of higher oil prices as the war between the United States and Iran drags on without apparent resolution.

Tech stocks led the downturn as the Nasdaq Composite dropped by 1.3%, followed by losses on the S&P 500 (0.6%) and the Dow Jones Industrial Average (0.2%).

Most ***ysts put the blame for the markets’ poor showing on news that 30-year Treasury yield surp***ed 5.3% for the first time since the global financial crisis in 2007, reflecting sagging demand from global buyers willing to underwrite sovereign U.S. debt.

Concerns over rampant government deficit spending and the United States’ burgeoning debt of nearly $40 trillion are pushing treasury yields higher, ***ysts noted.

The shorter 10-year Treasury, meanwhile, ended above 4.7%, compared to below 4% before the start of the Iran War in February.

Rising “T-bill” yields are considered a danger signal for the broader economy and consumer spending because they can have the knock-on effect of pushing up virtually all borrowing costs, from auto loans to mortgages.

The latter is being reflected in costlier mortgage rates. A 30-year, fixed-rate mortgage on Tuesday stood at 6.75% after ending last week at 6.69%.

Meanwhile, oil prices on Tuesday reached their highest level in more than two weeks after President Donald Trump threatened to “bomb” Oman if it interferes with his plans to open the strategic Strait of Hormuz.

The benchmark Brent crude futures traded around $91 per barrel, while U.S. West Texas Intermediate crude futures rose to $84 per barrel.