S&P Snaps Losing Streak as Treasury Buyback Eases Yields
As of 2026-08-20 07:00 SGT
Key points
- Wall Street closed higher, with the S&P 500 snapping a three-session losing streak after the Treasury's surprise move to at least double its long-end buyback operations eased pressure on yields; the Dow and S&P 500 advanced while the Nasdaq lagged as Broadcom sold off
- July's FOMC Minutes showed many participants judged a rate hike would likely be necessary if inflation didn't cool, even as an $18 billion 20-year Treasury auction drew soft demand and US government debt passed $40 trillion
- The dollar stayed broadly offered into the close, with EUR/USD at an 11-week high above 1.1650 and GBP/USD near a three-month peak above 1.3600, though USD/JPY was little changed near 158.22
- Gold futures firmed to $4,577.10 and Bitcoin jumped 7.06% to $69,249 as lower yields and a softer dollar broadly supported risk assets, while WTI held little changed near $84.28 with Hormuz-linked supply risk still in play
- Tokyo's Nikkei 225 closed down 3.16% at 65,326 and South Korea's Kospi triggered a circuit breaker in the Aug 19 Asia session, setting a cautious backdrop ahead of today's Australian jobs data and tonight's US data
Market snapshot
| Instrument | Level | Change |
|---|---|---|
| USD/JPY | 158.22 | +0.07% |
| EUR/USD | 1.1678 | +0.87% |
| Nikkei 225 (close) | 65,326 | -3.16% |
| Hang Seng (close) | 25,495 | +0.16% |
| Dow futures | 53,573 | +0.08% |
| S&P 500 futures | 7,741.00 | +0.16% |
| Nasdaq 100 futures | 29,633 | +0.41% |
| Gold futures | 4,577.10 | +0.70% |
| WTI crude | 84.28 | -0.13% |
| Bitcoin | 69,249 | +7.06% |
| US 10-yr yield | 4.653% | -5.3bp |
Foreign exchange — Dollar broadly offered, yen the laggard
The dollar stayed broadly offered into the New York close after the Aug 19 Treasury buyback surprise weighed on the greenback across G10. EUR/USD extended to an 11-week high above 1.1650, last near 1.1678 (+0.87%), while GBP/USD pushed to its best level since May above 1.3600 after UK headline CPI matched estimates at 2.9% y/y and core CPI came in a touch hot at 2.6% y/y. USD/JPY was little changed at 158.22 (+0.07%), consolidating within the Aug 18 session's 158.05-159.53 range even as the broader dollar softened elsewhere. As Tokyo opens today, USD/JPY looks set to stay anchored within that range unless the softer-dollar theme broadens out to the yen.
Equities — Wall Street closes higher on rate relief, Nasdaq lags on Broadcom slide
US equities closed higher on Aug 19, with the S&P 500 snapping a three-session losing streak as the Treasury's buyback announcement eased pressure on long-end yields. The Dow and S&P 500 advanced while the Nasdaq lagged, dragged by a sharp Broadcom selloff after Marvell landed an AI chip supply deal with Google — long a key Broadcom customer — that includes warrants for Google to acquire up to $12.2 billion in Marvell shares; Marvell shares popped 10% on the news, and Moderna and Merck both rallied sharply on encouraging late-stage cancer-vaccine trial results. In the same Aug 19 Asia session, Tokyo's Nikkei 225 closed down 3.16% at 65,326 and South Korea's Kospi triggered a circuit breaker as broader Asian equities slid, while Hong Kong's Hang Seng managed a 0.16% gain to 25,495. Dow, S&P 500 and Nasdaq 100 futures are all firmer heading into today's session, last at 53,573 (+0.08%), 7,741.00 (+0.16%) and 29,633 (+0.41%) respectively. At today's open, that overnight strength points to a steadier tone for Tokyo, though the Kospi's circuit breaker is a reminder risk appetite across Asia remains fragile.
Macro — FOMC Minutes flag a hawkish tilt, weak 20-year auction underscores fiscal strain
The Fed's July 28-29 meeting minutes showed many participants judged a rate hike would likely be necessary if inflation did not cool, a hawkish signal that landed alongside the Treasury's own scramble to steady the bond market. The Treasury said it would at least double the size of its long-end liquidity-support buyback operations, a move Deutsche Bank flagged as unambiguously dollar-negative and akin to soft financial repression, even as it helped pull the 10-year yield down 5.3bp to 4.653%. An $18 billion 20-year Treasury auction drew a soft result, with a 0.5bp tail, 2.53x bid-to-cover and softer-than-average indirect demand, suggesting duration appetite remains cautious despite the new buyback support. US government debt passed $40 trillion, more than doubling over the past decade, adding to scrutiny of Fed independence after senators pressed Fed Chairman Kevin Warsh to disclose his contacts with President Trump. Ahead of tonight's Philly Fed and jobless claims data, the tug-of-war between hawkish minutes and an easier fiscal-liquidity backdrop looks set to keep yields choppy.
Commodities — Gold extends its rally, oil holds near multi-week high on Hormuz risk
Gold futures held firm at $4,577.10 (+0.70%), building on the Aug 19 rally to a fresh high above the Aug 18 session's $4,434.10 top as falling Treasury yields and the softer dollar drew fresh buying into the metal. WTI crude was little changed at $84.28 (-0.13%), consolidating just below the Aug 18 session's $84.57-$85.94 range after a fourth straight session of gains tied to fighting around the Strait of Hormuz. At the Tokyo open, gold looks set to keep tracking the yield and dollar moves while oil stays underpinned by the Hormuz risk premium.
Geopolitics — UAE severs Iran trade as Hormuz tensions widen
The UAE said it has halted trade with Iran after a reported missile strike on its territory, a move a former official described as more significant than the earlier US embargo given the Emirates' long-standing role as a major trading hub for Iran. The US military has reportedly been quietly running a shipping corridor through the Strait of Hormuz for weeks, moving about 10 million barrels of oil a day out of the Gulf via a southern channel off Oman, Axios reported, even as fighting around the strait kept crude on its fourth straight session of gains. US embassies issued fresh travel-risk warnings amid rising US-Iran tensions, and diesel prices in California rose to $7 a gallon as the wars in Europe and the Middle East strained fuel supply. President Trump said talks with Iran are continuing and that oil prices "will be a lot lower" once the war ends. Heading into today's Asia session, the Hormuz standoff remains the dominant swing factor for oil and safe-haven flows, with little sign of near-term de-escalation.
Upcoming events
| Time (SGT) | Region | Event | Impact |
|---|---|---|---|
| 08/20 09:30 | AU | Employment Change (forecast 11.7K) | High |
| 08/20 09:30 | AU | Unemployment Rate (forecast 4.4%) | High |
| 08/20 20:30 | US | Philly Fed Manufacturing Index (forecast 24.1) | Medium |
| 08/20 20:30 | US | Unemployment Claims (forecast 210K) | Medium |
| 08/21 14:00 | UK | Retail Sales m/m (forecast -0.5%) | Medium |