Market Report, 2026-08-17

The halt in stock rallies continued on Monday as geopolitical risks resurfaced. Although the U.S. administration signaled eagerness to reach an agreement with the Iranian regime, the messaging has changed drastically, and the agreement, technically ending today, may not be renewed. The President went so far as to insist on the waterway becoming a U.S. territory, all while Omani and Iranian leaders are negotiating how the waterway will be managed. The insistence went as far as threatening to bomb Oman if it gets in the way. Nevertheless, the political brinkmanship coming from President Trump is not uncommon; he has historically used many similar tactics in negotiations. The market may have incorporated the possibility that some of the rhetoric is merely posturing and therefore sent Brent crude oil only slightly above $90 per barrel.

The Dow Jones Industrial Average posted a loss of 273 points, falling to 53,460. The NASDAQ declined by 0.32% to 26,645. The S&P 500 lost half a percentage point, falling to 7,745. The market was largely held up by a few large tech stocks, as increasing concentration in technology has allowed just a few tech companies to contribute to most of the market's returns.

The bond market held up as well. Yields are already at the higher end of their range over the past five years, and higher inflation may already be priced in. The 5-year U.S. Treasury yield rose 2 basis points to 4.38%, and the 10-year yield rose 3 basis points to 4.73%.

Today's economic data showed that manufacturing activity in New York gained significantly more traction than we expected in August, while the housing market generally remained stable.