18/08/2026

The renewed deadlock in U.S.–Iran negotiations pushed oil prices and long-term Treasury yields higher, weighing on U.S. equities for a second consecutive session. However, concerns over AI demand and capital expenditure eased, driving a strong rally in memory and semiconductor stocks and pushing the Philadelphia Semiconductor Index back into a technical bull market. (Reuters)

S&P 500 fell 0.52% to 7,745.06

Dow Jones fell 0.51% to 53,459.78

Nasdaq fell 0.31% to 26,644.91 (Reuters)

The 2-year U.S. Treasury yield rose around 1 bp to approximately 4.18%.

The 10-year U.S. Treasury yield rose around 3 bps to approximately 4.73%; the 30-year yield briefly reached around 5.31%, its highest level since 2007. (Barron’s)

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News

1) U.S.–Iran talks hit another deadlock as Trump escalates threats; Iran prepares for further conflict, while “dark shipping” continues to support oil supply

* Trump said he is in no rush to end the war with Iran and warned that the U.S. could take military action if Oman obstructs negotiations, drawing the traditional mediator deeper into the dispute. (Financial Times)

* Iran argues that the U.S. failed to honour previous understandings and said the original 60-day negotiation deadline has lost its relevance, reducing the likelihood of a diplomatic breakthrough. (Wallstreetcn)

* Reports suggest that Iran’s Revolutionary Guard is using the ceasefire period to expand missile and drone production, strengthen coordination with militias in Yemen and Iraq, and reorganise its military command structure in preparation for another potential confrontation. (Wallstreetcn)

* Iran also warned that further U.S. attacks on its energy infrastructure could trigger broader strikes against Gulf energy and shipping assets, keeping supply risks around the Strait of Hormuz elevated. (Wallstreetcn)

* With negotiations stalled, Brent crude rose by more than US$2 on Monday and moved back above the US$90 area, reviving concerns over energy-driven inflation. (Reuters)

* However, Middle Eastern producers continue exporting crude through “dark shipping”, including switching off vessel transponders and conducting ship-to-ship transfers in the Gulf of Oman. Actual flows have exceeded earlier market estimates of around 4 million barrels per day, while the U.S. Energy Secretary said recent flows may have approached 9 million barrels per day. (Wallstreetcn)

* Together with alternative pipelines, strategic petroleum reserve releases and weaker global demand, Brent crude has generally remained within the US$80–90 range in August, far below the most pessimistic early-war forecasts of US$150. (Wallstreetcn)

Market impact: Renewed geopolitical risk is pushing oil prices and long-term inflation expectations higher, creating pressure on growth-stock valuations, bonds and consumer-related sectors.

Positive factor: “Dark shipping”, alternative pipelines and strategic reserves mean actual oil supply remains much stronger than the market’s worst-case expectations. As long as energy flows through the Strait of Hormuz do not completely stop, the risk of an uncontrolled spike in oil prices remains relatively contained.

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2) 30-year Treasury yield hits highest level since 2007 as oil, fiscal deficits and AI financing push long-end rates higher

* The U.S. 30-year Treasury yield briefly rose to around 5.31%, its highest level since 2007, while the 10-year yield climbed to approximately 4.73%. (The Wall Street Journal)

* The first source of pressure is oil. With Brent crude moving back above the US$90 area, investors are concerned that higher energy prices could lift future inflation, prompting long-term bond investors to demand a higher risk premium. (The Wall Street Journal)

* The second source of pressure is the U.S. fiscal deficit and the growing supply of long-dated Treasuries. Markets are increasingly focused on the government’s need to issue large amounts of debt to finance future spending, testing demand for long-duration bonds. (Reuters)

* The third source is AI capital expenditure. Major technology and AI companies require enormous amounts of financing over the coming years to build data centres, power infrastructure and computing capacity. Rising corporate bond issuance is therefore competing with U.S. Treasuries for long-term capital. (Reuters)

* Meanwhile, foreign holdings of U.S. Treasuries fell from US$9.371 trillion in May to US$9.299 trillion in June, a decline of roughly US$72 billion. (Reuters)

* Japan remains the largest foreign holder, but its holdings fell around 2.3% month-on-month to US$1.116 trillion in June. The UK and China also reduced their holdings, with China’s position falling to US$633.4 billion, its lowest since 2008. (Reuters)

* Importantly, total foreign holdings were still up around 2.3% year-on-year, suggesting weaker marginal demand rather than a broad-based exit from U.S. Treasuries. (Reuters)

Market impact: Persistently higher long-term yields increase corporate financing costs and equity discount rates, creating the greatest pressure on high-valuation technology stocks, real estate and other long-duration assets.

Positive factor: The 2-year yield remains well below longer-term yields, suggesting that markets are becoming less concerned about further Fed rate hikes. If employment and inflation continue to cool, lower short-term yields could partly offset the pressure from the long end. (MarketWatch)

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3) Anthropic targets nearly US$200 billion in 2028 revenue as improving AI demand drives a re-rating in Micron, SanDisk and other memory stocks

* Anthropic is reportedly building an IPO valuation framework around long-term growth expectations rather than near-term profitability, with projected 2028 revenue of around US$190–200 billion. (Wallstreetcn)

* This projection is far above Anthropic’s annualised revenue run rate of approximately US$47 billion in May, showing that investors are betting on continued rapid growth in enterprise AI demand over the next two years. (Wallstreetcn)

* Anthropic’s preliminary second-quarter revenue exceeded US$11.5 billion, nearly 14 times higher year-on-year, while OpenAI’s annualised revenue run rate has reached approximately US$40 billion. This is helping ease previous concerns that AI investment was producing “capex without sufficient revenue”. (Wallstreetcn)

* Accelerating AI-model revenue implies continued demand for GPUs, HBM, DRAM, NAND, networking equipment and data-centre infrastructure, with AI spending increasingly spreading across the broader hardware supply chain. (Wallstreetcn)

* Micron rose 4.1% on Monday and gained approximately 17.5% over five sessions; SanDisk gained 8.9%, Western Digital 5.4%, and Seagate 2.2%. (Wallstreetcn)

* The Philadelphia Semiconductor Index rose around 1.6% and has rebounded more than 20% from its 29 July low, returning to a technical bull market after its previous technical bear market lasted only around 21 days. (Wallstreetcn)

* SanDisk’s Investor Day also reinforced confidence in the durability of the memory cycle, with the company targeting medium- to long-term revenue growth of more than 15% and stronger margins, further supporting the sector’s valuation re-rating. (Wallstreetcn)

Market impact: The AI trade is broadening beyond GPU leaders such as NVDA into memory and infrastructure names including MU, SNDK, WDC and STX, supporting a broader re-rating across the semiconductor sector.

Positive factor: Unlike the earlier AI rally that relied heavily on capex expectations, Anthropic and OpenAI are now demonstrating accelerating actual revenue. If AI monetisation continues to materialise, the sustainability of AI infrastructure investment will have much stronger fundamental support.

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4) NVIDIA cuts OpenAI guarantee to US$105 billion; Apple may raise iPhone 17 prices amid memory shortages

* NVIDIA formally disclosed that it will provide up to US$105 billion of credit support for OpenAI’s large PORTS-Pike data-centre project in Ohio, significantly below earlier media reports of an original plan of around US$250 billion. (Wallstreetcn)

* NVIDIA will also invest US$1.5 billion in project developer SB Energy, while OpenAI will be the data centre’s sole tenant. (Wallstreetcn)

* The first phase is expected to deploy approximately 4.25GW of IT load, with an option to expand by another 3.75GW, bringing total planned capacity to as much as 8GW. (Wallstreetcn)

* NVIDIA emphasised that the guarantee does not cover all of OpenAI’s debt or lease obligations. Instead, it applies only to selected rental payments, power obligations and residual-value risks for certain assets, making the actual exposure smaller than the market had initially feared. (Wallstreetcn)

* Separately, supply-chain reports suggest Apple could adjust global iPhone 17 series pricing before the end of August, with increases of up to around RMB1,000 per device. Apple has not formally confirmed a global price increase. (Wallstreetcn)

* The main reason is shortages and rising prices for memory chips such as DRAM and NAND. Apple has already increased prices for Macs and iPads, while certain iPhone 17 models in Japan have also seen price adjustments. (Wallstreetcn)

* Apple previously absorbed part of the rise in memory costs, helping support iPhone shipments and market share. If it now begins passing those costs on to consumers, it would further confirm that memory suppliers continue to retain strong pricing power. (Reuters)

Market impact: NVIDIA’s smaller guarantee helps ease concerns over “circular financing” and balance-sheet exposure, while potential Apple price increases suggest that memory shortages are beginning to spread from AI servers into consumer-electronics costs.

Positive factor: For Micron, SK Hynix, Samsung and the broader memory supply chain, the fact that Apple may need to raise prices to offset higher memory costs further reinforces the view that DRAM and NAND supply remains tight and supplier pricing power remains strong. At the same time, NVIDIA’s reduction of the guarantee from US$250 billion to US$105 billion suggests that the company is becoming more disciplined in managing AI financing risk.

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Daily — 18/08/2026

Today’s Market Focus

* U.S. housing and industrial data will be the main macro focus, while markets will continue monitoring oil prices, developments in the U.S.–Iran conflict and changes in long-term Treasury yields.

* The July FOMC meeting minutes will be released tomorrow, 19 August, so markets may begin repositioning today around expectations for the Fed’s September policy path. (MarketWatch)

Key U.S. Data

* 20:30 Singapore time: July Housing Starts & Building Permits

* 20:30: July Import & Export Price Indexes

* 21:15: July Industrial Production

* 21:15: July Capacity Utilisation

* 22:00: July Pending Home Sales (Econoday)

Earnings

* Home Depot (HD) — Pre-market: Focus on U.S. consumer demand and the home-improvement market. (Investopedia)

* Baidu (BIDU) — Pre-market: Focus on its AI business and advertising performance. (Newsquawk)

* Keysight Technologies (KEYS) — After market: Focus on semiconductor, AI and data-centre-related testing demand. (Keysight Investor Relations)

* There are no major Mag 7 U.S. technology earnings today. The next major tech catalyst this month remains NVIDIA’s earnings on 26 August. (MarketWatch)