August 18, 2026

Stock indexes retreated amid renewed escalation of tensions in the Middle East

International

The main US stock indexes declined yesterday. The S&P 500 fell 0.5%, the Nasdaq dropped 0.3%, and the Dow Jones Industrial Average declined 0.5%. Year-to-date, the indexes have accumulated gains of 13.1%, 14.6%, and 11.2%, respectively.

The decline occurred on a day marked by a renewed escalation of tensions in the Middle East, following the expiration yesterday, without any signs of renewal, of the memorandum of understanding between the United States and Iran. The agreement, reached in June, set a 60-day deadline for negotiating a final accord. In this context, President Donald Trump urged Iran to surrender and threatened to attack Oman if it interferes with Washington's efforts to maintain traffic through the Strait of Hormuz, a key route for global oil trade. The escalation boosted oil prices during trading.

Regarding the US Treasury yield curve, yields moved upward. The 1-year Treasury note rose from 3.96% to 3.97%, while the 3-year note remained unchanged at 4.25%. Meanwhile, the 10-year Treasury note climbed from 4.69% to 4.72%.

Finally, in terms of commodities, movements were mostly bullish, driven by the aforementioned geopolitical escalation. Oil rebounded strongly: WTI advanced 2.5% and closed at USD 84.5 per barrel, while Brent rose 2.7% to USD 90.9 per barrel. Gold also advanced 0.9% and closed at USD 4,416.0 per ounce. Soybeans, meanwhile, rose 2.3% and closed at USD 441.2 per ton.

Early this morning, economic data from Japan and China were released. In Japan, industrial production for June rose by 1.9%, well above the 1.3% expected by analysts. In China, industrial production for July increased by 4.5% year-on-year, below the 5.0% estimated by analysts, while the unemployment rate for July was 5.2%, slightly above the 5.1% forecast.

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