US Stocks Slip as Oil, Treasury Yields Rise; Chip Shares Gain on AI Optimism

Middle East tensions push 10-year Treasury yield back above 4.7%

Rate-hike expectations have eased, but oil remains a drag on sentiment

US stocks edged lower on August 17 as higher oil prices and a continued rise in long-term Treasury yields weighed on sentiment. Technology shares, including semiconductors, advanced after surging revenue at AI startup Anthropic fueled optimism about artificial intelligence.

As of 10:15 a.m. in New York, the S&P 500 was down 0.1% and the Dow Jones Industrial Average fell 0.2%. The Nasdaq 100 rose 0.2% as chip stocks resumed their advance.

Micron climbed more than 4% to $1,017, while SK Hynix ADRs rose nearly 4% to $173. Sandisk gained more than 6%, and Broadcom and Nvidia also traded higher.

Optimism around AI hardware shares spread after Bloomberg reported that Anthropic posted $11.5 billion in second-quarter revenue, up 14-fold from a year earlier, and recorded its first quarterly operating profit.

Oil prices edged up after President Donald Trump threatened to bomb Oman if it entered the conflict. A senior Iranian official said tensions would escalate in the Strait of Hormuz and the wider region if diplomatic efforts fail.

West Texas Intermediate crude futures rose 0.5% to $83 a barrel, while Brent crude, the international benchmark, traded around $89 a barrel.

Even after relatively tame inflation data last week reduced expectations for a Federal Reserve rate increase, the 10-year Treasury yield rose 1 basis point to 4.70%, moving back above 4.7%.

The S&P 500 hit a record high last week, helped by strong corporate earnings. Better-than-expected results buoyed investor sentiment and allowed US stocks to extend gains despite geopolitical tensions in the Middle East. Disappointing retail sales data and relatively mild inflation also reduced expectations for a Fed rate increase in September, CNBC reported, supporting the latest all-time highs.

Lori McPherson, chief market strategist at Len Sterling, told CNBC on August 17 that shifting expectations for rate increases had affected some technology shares. That helps explain why tech stocks lagged in July despite strong earnings, but have recently rallied sharply.

Still, renewed instability in the Middle East, along with higher oil prices and a benchmark 10-year Treasury yield above 4.7%, appeared to weigh on investors on August 17.

There are no major economic data releases scheduled this week, and the Federal Reserve is due to release the minutes of its latest meeting on August 19. Home Depot and Lowe's are set to report earnings on August 18 and August 19, while Walmart is scheduled to report on August 20.

Kim Jeong-a, contributing reporter, Hankyung.com, kja@hankyung.com