The Dow fell more than 1%: The Treasury Department's plan to curb government bond yields failed

All three major U.S. stock indices closed lower on August 20. The continued rise in Treasury yields—despite interventions by the Treasury Department—dampened investors’ risk appetite, while disappointing quarterly results from leading retailer Walmart dampened the desire to invest in the consumer sector, and rising oil prices intensified fears about inflation, according to Reuters. The U.S. Treasury’s plan to curb Treasury yields has failed, notes CNBC.

Against this backdrop, the Dow Jones fell 1.32%, posting the worst performance among Wall Street’s major indexes on Thursday. The tech-heavy Nasdaq Composite lost 1%. The S&P 500 fell 0.87% under pressure from declining shares of major tech companies.

Walmart’s stock fell by 9%—its steepest decline since 2022—due to disappointing comparable sales in the U.S., according to Bloomberg. Reuters notes that this trend dragged down the entire S&P 500 Consumer Staples Index (-1.9%) as well as the consumer discretionary sector (-1.77%).

Brent crude oil prices rose by more than 2%, briefly reaching their highest level since July 24 —$94.7 per barrel. U.S. WTI futures jumped to $89. Investors reacted to U.S. President Donald Trump’s statements about an “economic war” against Iran, as well as his threats of sanctions against third countries that cooperate with Tehran and assist it.

The yield on 10-year government bonds rose by more than 5 basis points to 4.704%, despite statements from the U.S. Treasury Department regarding a possible larger-scale Treasury bond buyback. The yield on 30-year Treasuries rose by more than 5 basis points to 5.248%.

“Questions arise as to how resilient consumers can be amid persistent inflationary pressures and high gasoline prices,” commented Mona Mahajan, head of investment strategy at Edward Jones (as quoted by Reuters).

This article is being updated

This article was AI-translated and verified by a human editor