U.S. Equities Weighed Down by Surging Long-Term Treasury Yields, Tech Stocks Lead Declines

Market Overview

Long-term Treasury yields surged sharply on Tuesday, driven by heavy corporate bond issuance and renewed concerns over fiscal conditions in developed economies. The U.S. 30-year Treasury yield approached the key 5% threshold, exerting broad pressure across equities.

In U.S. markets, large-cap tech stocks bore the brunt of the selloff, with the “Magnificent Seven” all closing lower. However, sentiment improved after hours as a U.S. court ruled that Google would not be required to divest its Chrome browser, sending Alphabet shares up more than 8% in late trading.

The stronger yields also pushed the U.S. Dollar Index higher by 0.7%. Meanwhile, the Japanese yen slid more than 1.2% amid political uncertainty triggered by leadership changes within the ruling party.

Safe-haven flows drove gold nearly 1.8% higher, with futures breaking above $3,600 for the first time in history. Bitcoin rebounded 2.3%, reclaiming the $110,000 level. WTI crude oil stabilized around $66 after wide intraday swings.

Hot Topics Ahead

Debt Storm Re-Emerging

Long-term government bond yields in major European economies are accelerating higher.

The U.K., Germany, and France all saw their 30-year yields climb to the highest levels since the financial crisis—or even this century.

On Tuesday, U.K. 30-year gilts reached 5.72% (the highest since 1998). German and French 30-year yields rose to 3.41% and 4.51%, the highest since 2011 and 2009, respectively.

The pound weakened sharply against the U.S. dollar, European equities retreated, and risk-off sentiment intensified.

U.S. ISM Manufacturing PMI Contracts for Sixth Straight Month

August ISM data showed manufacturing activity shrinking for the sixth consecutive month due to declining output.

On the positive side, new orders expanded for the first time this year, while the prices index fell to its lowest since February, suggesting tariff-related price volatility is easing.

U.S. August ISM Manufacturing PMI came in at 48.7 (consensus: 49, prior: 48). The 50 threshold marks expansion versus contraction, underscoring that the U.S. manufacturing sector remains in a downturn.

Key Events to Watch

21:00 GMT+8 – U.S. FOMC voter (2025), St. Louis Fed President Musalem speaks on the U.S. economy and monetary policy

22:00 GMT+8 – U.S. July JOLTs Job Openings; U.S. July Factory Orders (MoM)

01:30 GMT+8 (overnight) – U.S. FOMC voter (2026), Minneapolis Fed President Kashkari participates in a fireside chat

02:00 GMT+8 (overnight) – Federal Reserve releases the Beige Book