Stocks Waver Before Fed Minutes as Yields Retreat
August 19, 2026
Yields slipped and stocks inched up amid a heavy corporate news flow and as the Treasury Department said it would increase its long-term debt purchases. Fed minutes arrive later.
Published as of: August 19, 2026, 9:12 a.m. ET
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| The markets | Last price | Change | % change |
|---|---|---|---|
| S&P 500® Index | 7,691.76 | -53.30 | -0.69% |
| Dow Jones Industrial Average® | 53,343.40 | -116.38 | -0.22% |
| Nasdaq Composite® | 26,289.71 | -355.20 | -1.33% |
| 10-year Treasury yield | 4.64% | -0.06 | -- |
| U.S. Dollar Index | 99.20 | -0.45 | -0.47 |
| Cboe Volatility Index® | 15.40 | -0.44 | -2.78% |
| WTI Crude Oil | $84.71 | -0.23 | -0.27% |
| Bitcoin | $65,015 | +$260 | +0.40% |
(Wednesday market open) Federal Reserve meeting minutes arrive today at an auspicious junction with global yields near multi-year highs and oil still climbing. There was good news this morning as President Trump delayed planned tariffs against Canada and Target (TGT) posted solid results. And major indexes rose and U.S. Treasury yields fell after the Treasury Department announced a plan to double the size of its government debt repurchases.
Tech came under pressure after The Wall Street Journal reported that OpenAI, which isn't publicly traded, suffered "tepid" second-quarter sales growth compared with competitor Anthropic. This hurt Oracle (ORCL), which has a large supplier agreement with OpenAI. Elsewhere, shares of Moderna (MRNA) spiked 90% after a cancer vaccine it's developing with Merck (MRK) showed promise against melanoma.
Tuesday saw stocks retreat for a third straight session from last week's record highs, dogged by rising yields and oil prices that dragged chips. High yields are particularly bearish for tech and small-cap firms that sometimes rely more on borrowing. Climbing yields also can make fixed income and cash seem more attractive to some investors, pulling money away from stocks.
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Three things to watch
- Minutes could shed light on rate timing: Fed minutes, due at 2 p.m. ET, could deliver insights into dissenters' arguments for a hike. One counter argument is economic data after the meeting, including a soft July jobs report. The Atlanta Fed's GDPNow fell to 4.3% for second quarter gross domestic product after that and soft retail sales data last Friday. At his last press conference, Fed Chairman Kevin Warsh implied that yields are in some ways doing the Fed's inflation-fighting job for it, perhaps making hikes less necessary. Data appears to back that, suggesting slower economic growth that ultimately might stifle prices. The wild card is oil, which the Fed can't control, though seasonal energy demand tends to fall after September's Labor Day holiday. Complicating matters, the Fed's September meeting is the last one before late October, which might come too close to the November election for the Fed to adjust rates. If that factor was discussed at the July meeting, investors might pencil in higher odds of a last-chance hike next month before campaign season accelerates.
- Why today's high yields could be a bigger burden: Debate swirls about how much rising global yields and U.S. rates might affect the AI buildout. Some analysts say a 25-basis point or even a 50-basis point rate jump by year-end wouldn't noticeably slow AI spending that's approaching $1 trillion a year, led by hyperscalers with traditionally deep pockets. That said, they once had deep free cash flow, too, but that's less true now as many rely more on borrowing. Another argument is that stocks rallied in the 1990s with rates around current levels, so why not again? That ignores oil, which was historically cheap in the late 1990s when the market posted four straight annual gains topping 20%. At its lows during the Asian financial crisis, crude fell below $15 a barrel, or about $30 in today's money. It now trades above $80, meaning investors can't necessarily count on consumer spending to pump the economy if yields stifle corporate demand. Diesel prices—a key cost of shipping products to consumers—hold a heavy premium to gasoline thanks to war-driven declines in refining capacity, not just in the Middle East but in Russia.
- China, Japan markets, data, tell different stories: Recent strength in Japan's stock market contrasts with yields there that recently touched 40-year highs ahead of what many analysts expect will be a rate hike next month by the Bank of Japan (BoJ). Tech companies there have posted strong earnings, and banks have also rallied as the yield curve steepened. "The risk for markets is if the BoJ significantly increased the pace of rate hikes and the yen rapidly advances," said Michelle Gibley, director of international equity research and strategy at the Schwab Center for Financial Research (SCFR). Recent currency intervention slowed but didn't stop yen weakness, raising concerns that U.S. stocks could take a hit if Japan tries to sell Treasuries to support the yen. Across the East China Sea, China's economy remains a tale of haves and have nots, Gibley added. Exports are strong but domestic demand is weak. Still, stocks have climbed recently on hopes that internet giants there can capitalize on AI investments. Sounds familiar.
On the move
- Target fell almost 1% despite strong results, possibly because positive earnings news had been built into shares in their impressive recent rally. Target topped estimates and raised its fiscal year guidance.
- Lowe's (LOW) slid 3% early. Earnings per share beat estimates and revenue was in line, but the company guided for fiscal 2027 results that were below consensus and reduced guidance for sales growth at stores open a year or more, citing "pressure" in home improvement spending, CNBC reported.
- TJX (TJX) lost 3.2% despite reporting solid results and giving above-consensus guidance.
- Estee Lauder (EL) climbed 8% early as earnings and revenue topped consensus. Guidance met expectations.
- Analog Devices (ADI) dropped 3.5% despite earnings per share and revenue beating estimates and guidance above consensus. Gross margin also rose. Shares had rallied sharply into the report, possibly leading to "sell the news" action.
- Moderna rose 97% and Merck rose 9% as the companies said a late-stage study of an experimental mRNA-based vaccine met its prime goal of extending the time before high-risk melanoma returns in patients, The Wall Street Journal reported. This is the first successful late-stage trial for a personalized mRNA cancer therapy after decades of research.
- Marvell Technology (MRVL) jumped 12% early after saying in a filing that its recent commercial agreement with Alphabet (GOOGL) includes a warrant for Google to purchase shares of Marvell at an exercise price of $206.58 per share, a discount to the current price.
- SK Hynix (SKHY) bucked the weak trend in tech with a 4% early gain. This came after its board approved a share repurchase and expanded its shareholder return target.
- Crude pulled back from earlier gains that came after the United Arab Emirates (UAE) severed ties with Iran, citing missile strikes. Iran threatened to hit U.S. targets in Europe, media reports said, and President Trump said there are no talks. Three ships sailed through the strait in the last 24 hours.
- Yields hit multi-year highs in Japan and some European countries amid worries about growing sovereign debt. The Treasury's debt repurchase plan announced today targets 10-year to 20-year and 20-year to 30-year debt, with a promise to "at least double" the maximum size of its buyback operations, CNBC reported.
- Caterpillar (CAT) fell 4.6% Tuesday, hurt by worries about AI data center and chip demand. Much of its long rally reflects construction strength related to AI.
- Meta Platforms (META) fell 4.4% Tuesday. It faces a trial in federal court that could bring as much as $1.4 trillion in penalties amid claims it deliberately designed its products to encourage compulsive use among youngsters, Bloomberg reported.
More insights from Schwab
Midterms outlook: Democrats are favored to retake the House while Republicans hold an edge in the Senate, wrote Michael Townsend, managing director of legislative and regulatory affairs at Schwab. "A Democratic House would mean more oversight of the Trump administration, fewer opportunities for major Republican legislation, and a higher probability that fiscal deadlines, appropriations fights, and the looming 2027 debt-limit negotiations become market-relevant events," Townsend said.
" id="body_disclosure--media_disclosure--183791" >Midterms outlook: Democrats are favored to retake the House while Republicans hold an edge in the Senate, wrote Michael Townsend, managing director of legislative and regulatory affairs at Schwab. "A Democratic House would mean more oversight of the Trump administration, fewer opportunities for major Republican legislation, and a higher probability that fiscal deadlines, appropriations fights, and the looming 2027 debt-limit negotiations become market-relevant events," Townsend said.
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Chart of the day
Data source: CME Group, Cboe. Chart source: thinkorswim® platform.
Past performance is no guarantee of future results.
For illustrative purposes only.
The futures market expects crude oil (/CL—red line) to decline in price over the next five months, though not by much. VIX futures (/VX—yellow line) are seen rising above 20 by then from current levels below 16. Neither market appears to anticipate anything dramatic happening despite the current geopolitical turmoil.
The week ahead
Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.
August 20: Conference Board Leading Indicators for July and expected earnings from Walmart (WMT), Alibaba (BABA), Deere (DE), NetEase (NTES), and Ross Stores (ROST).
August 21: No major earnings or data expected.
August 24: No major earnings or data expected.
August 25: August Consumer Confidence, July new home sales, and expected earnings from Bank of Montreal (BMO), Dick's Sporting Goods (DKS), Intuit (INTU), and Zoom (ZM).
August 26: July PCE and core PCE, July personal income and spending, second quarter GDP second estimate, July durable orders, and expected earnings from Nvidia (NVDA), Salesforce (CRM), Williams-Sonoma (WSM), CrowdStrike (CRWD), Synopsys (SNPS), Agilent (A), HP (HPQ), and Okta (OKTA).