By William Collins, consultant in stock markets – Eurasia Business News, August 20, 2026. Article no 3109
U.S. stocks fell sharply on August 20 as Treasury yields climbed again, crude oil prices advanced and disappointing corporate earnings weighed on investor sentiment.
The Dow Jones Industrial Average dropped roughly 600 points, while Treasury Secretary Scott Bessent signalled that the U.S. government could expand long-term bond repurchases beyond $4 billion per operation.
The Dow was down 0.8% in late trading, the S&P 500 lost 0.3% and the Nasdaq Composite fell 0.7%. Seven of the 11 S&P 500 sectors traded lower, led by consumer discretionary stocks. Energy was the standout performer as oil futures continued to rise.
Bessent Signals Bigger Treasury Buybacks
Bessent said the Treasury Department’s upcoming purchases of longer-dated government bonds “could be more than the $4 billion per issue” previously outlined. He said officials have “a big toolkit” and argued that current long-term yields do not accurately reflect underlying U.S. economic fundamentals.
On August 19, the Treasury announced it would at least double liquidity-support buybacks for securities in the 10- to 20-year and 20- to 30-year maturity ranges. The maximum size of each operation will rise from $2 billion to at least $4 billion, beginning September 9. The stated goal is to improve liquidity in older and less actively traded Treasury securities.
The original announcement briefly lowered yields. The 30-year Treasury yield fell as much as 10 basis points on Wednesday after the plan was disclosed, while the dollar weakened and equities, gold and Bitcoin rose.
Bond Yields Reverse Higher
The market relief did not last. On Thursday, Treasury yields resumed their rise as investors focused on persistent inflation concerns, expanding fiscal deficits and large funding needs from both the federal government and technology companies.
The 2-year Treasury yield rose 3 basis points to 4.19%. The benchmark 10-year yield increased 6 basis points to 4.70%, while the 30-year yield added 6 basis points to 5.25%. Earlier in the week, the long-bond yield climbed above 5.3%, its highest level since 2007.
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Bessent attributed part of the pressure to poor liquidity in the 30-year Treasury market, seasonal August trading conditions and heavy corporate debt issuance. However, critics argue that targeted buybacks cannot resolve the broader issue of sustained federal borrowing. The U.S. national debt recently surpassed $40 trillion, intensifying questions about long-term fiscal policy.
Walmart Earnings Hit Retail Shares
Retail stocks were under pressure after Walmart reported quarterly results and an outlook that fell short of investor expectations. Walmart shares declined 8.8%, adding to weakness in the consumer-discretionary sector. The selloff reflected concern that consumers could face increased pressure from higher borrowing costs, elevated fuel prices and persistent inflation.
Alibaba also reported weaker-than-expected earnings, reinforcing concerns about global consumer demand and contributing to the broader decline in technology-related shares.
By contrast, Strategy rose 8.2% as cryptocurrency-linked stocks outperformed. The group benefited from renewed optimism around industry-friendly legislation and expectations that expanded Treasury purchases could support liquidity-sensitive assets.
Oil Prices Rise on Iran Tensions
Energy stocks gained as crude oil prices climbed. Brent crude futures rose 2.4% to $93.78 per barrel after President Donald Trump vowed to impose “maximum economic pain” on Iran. WTI crude traded near $86.40, placing the Brent-WTI spread at approximately $6.61 per barrel.
The rise in oil prices reflects growing concern that geopolitical tension and stalled negotiations over the Strait of Hormuz could disrupt global energy supplies. Higher crude prices may also complicate the inflation outlook, creating another challenge for the Federal Reserve and bond investors.
Jobless Claims Stay Low
Initial U.S. jobless claims fell by 6,000 to 206,000 for the week ended August 15, below the 211,000 consensus estimate. The data indicates that the labour market remains resilient, but it may also reduce expectations for near-term monetary easing.
For markets, the August 20 session showed that Treasury buybacks alone may not keep long-term yields down. Investors will continue watching federal borrowing, inflation data, oil prices and Treasury-market liquidity for clues on whether higher financing costs become a more persistent threat to stocks and the economy.
Gold price at $ 4,527
Gold prices held firm on August 20, 2026, with spot gold trading near $4,529.10 per ounce in late New York dealings. The metal was up $7.60, or 0.17%, on the session. Live pricing showed a bid of $4,528.50 and an ask of $4,530.50, while the intraday range extended from $4,449.80 to $4,541.70 per ounce.
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The one-minute XAU/USD chart showed gold recovering from earlier volatility and consolidating just below the $4,530 level. This level is a near-term technical focus, while the session high near $4,542 marks resistance.
Gold’s broader momentum remained positive: it gained 3.51% over three days, 2.75% over seven days and 13.03% over 30 days. Over one year, spot gold rose 36.67%, underlining persistent investor demand for the precious metal.
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© Copyright 2026 – Eurasia Business News. Article no. 4009
Eurasia Business News 