August 19 Financial Morning Briefing: US Treasury yields soar, gold plunges, peace prospects shattered, Trump announces no talks with Iran, driving oil prices sharply higher

Huitong Finance, August 19 — In the Asian session on August 19th, spot gold traded near $4,330/ounce. Gold prices retreated on Tuesday, as U.S. Treasury yields soared to their highest levels in decades, while escalating U.S.-Iran tensions further intensified inflation concerns.

In the early Asian session on Wednesday (August 19, UTC+8), spot gold was trading near $4,330/ounce. Gold prices fell back on Tuesday due to the U.S. Treasury yields surging to their highest levels in decades and intensified inflation fears amid growing U.S.-Iran tensions. U.S. crude traded near $84.50/barrel, with oil prices closing at more than a three-week high on Tuesday, driven by the collapsed prospects for a U.S.-Iran peace agreement. Trump stated there would be no talks with Iran now or in the future.

Key Focus Today

Stock Market

U.S. stocks closed lower on Tuesday, led by semiconductor stocks dragging down the tech sector due to dissipating prospects for Middle East peace, pushing oil prices up and sending the U.S. 30-year Treasury yield to its highest since 2007, while the 10-year yield touched its highest since January 2025. This has fueled market concerns about borrowing costs and inflation, thereby reducing investors’ willingness to pay high prices for future tech company profits.

The S&P 500 index dropped 0.69% to 7,691.76 points, the Nasdaq index plunged 1.33% to 26,289.71 points, both posting the largest single-day declines since July 29. The Dow Jones Industrial Average edged down 0.22% to 53,343.40 points. The Philadelphia Semiconductor Index tumbled 5%, Nvidia fell 2.3%, Micron Technology retreated 7% after five days of sharp gains, SanDisk and Western Digital fell 9% and 7.4% respectively, and the Roundhill Memory ETF plunged 8.8%.

Funds rotated from high-growth sectors to defensive ones, with healthcare up 1.6%, staples up 1.1%, and energy up 1.8% supported by oil prices. The Wall Street Volatility Index (VIX) closed at 15.84, its highest since August 4; Home Depot’s revenue beat expectations but its stock slightly dipped by 0.1%. Investors are awaiting earnings reports from Walmart, other retailers, and the Fed’s July meeting minutes on Wednesday. Nvidia’s upcoming quarterly results are also seen as the next major test for AI momentum.

Gold Market

Gold prices pulled back on Tuesday, with spot gold falling 1.85% to $4,334.65/ounce, as U.S. Treasury yields surged to multi-decade highs — the 30-year yield hitting its highest since mid-2007. Meanwhile, escalating U.S.-Iran tensions pushed oil prices up for the third consecutive trading day, further fueling inflation worries and pressuring non-yielding gold.



Zaner Metals analysts stated that the steepening yield curve and stronger oil prices were the main reasons for gold’s weakness that day. However, they remain optimistic about the medium- to long-term outlook for gold, suggesting the market may need to consolidate before regaining buying interest. Investors are watching Wednesday’s Fed minutes for guidance on interest rate paths.

Other precious metals also moved lower; spot silver fell 3.72% to $63.33/ounce, platinum dropped 2.5%, and palladium fell 3.1%.

Oil Market

Oil prices closed at their highest levels in more than three weeks on Tuesday. Brent crude rose 0.24% to close at $91.27/barrel, and U.S. crude rose 0.14% to close at $85.07/barrel, both hitting new highs since July 24, primarily due to the collapse of a U.S.-Iran peace agreement.



Iran vowed to take an “all-out offensive” military stance and to keep the Strait of Hormuz closed until the U.S. meets its conditions, while the U.S. ruled out the possibility of extending the ceasefire. However, gains were limited as market reaction to daily headlines has faded, and shipping and trade data show Saudi Aramco has resumed tanker operations in the strait, partly easing supply concerns.

Meanwhile, the number of ships transiting the Strait of Hormuz remains in single digits (excluding those with transponders shut off). Iran's chief negotiator reiterated the blockade conditions, while Trump stated no talks with Iran for now, but the strait remains open; these comments did not spark strong market reactions.

Currency Market

The U.S. Dollar Index held steady near 99.60 on Tuesday as the market continued to digest expectations that the Fed may react dovishly after recent weak economic data, including July’s unexpected drop in employment and moderate inflation. The likelihood of a 25 basis point rate hike in September has reversed, with odds for no change close to 70%. In an environment with frequent supply shocks, inflation buffer is limited, and the Fed’s dovish stance, combined with recent CPI and employment data, has driven the dollar weaker.



The Strait of Hormuz remains practically closed, U.S.-Iran peace talks are deadlocked with ongoing conflict, intensifying inflation worries and sending global bond yields higher — with the U.S. 30-year Treasury yield rising to its highest since 2007.

The euro slipped from a two-month high to $1.15760, the British pound was just below a three-month high, the dollar rose 0.17% against the Swiss franc, and the dollar traded at 159.60 yen, recovering nearly half its losses since the late July U.S.-Japan joint intervention. Traders are watching for further intervention and the next Bank of Japan meeting, which is expected to raise rates.

International News

U.S. President Trump stated on social media on the 18th that there would be no talks or dialogue with Iran now or in the future. He also declared that the U.S. maritime blockade against Iran remains fully effective, with the Strait of Hormuz open and functioning normally, and all naval mines cleared or detonated. (Xinhua News Agency)



A U.S. official said Trump has instructed senior government envoys to suspend contacts with Iran. Additionally, a source familiar with the matter reported that White House officials recently relayed to political allies a shift in its Iran strategy—from “striking Iran as soon as possible” to a long-term approach of “strangling” Iran. U.S. officials said Trump had asked his negotiating team not to contact Iran for the time being. This team includes Vice President Vance, Trump’s special envoy Whitkopf, and Trump’s son-in-law Kushner. According to officials, this directive was issued after the U.S. had some “positive discussions” with Iran. There has been no response from the Iranian side.



On August 19 local time, Afra Al Hameli, Director of Strategic Communications at the UAE’s Ministry of Foreign Affairs, said that due to escalating regional tensions, the UAE has suspended all trade, commercial and financial dealings with Iran until further notice. Hameli reiterated that the UAE remains committed to “dialogue, cooperation, and regional integration as critical pathways to enhancing regional peace, stability, and prosperity.” (CCTV News)



According to sources, an agreement between the U.S. and Canada to avoid new tariffs on Canadian goods is now pending Trump’s decision. The authority to formally impose 50% tariffs at midnight, as planned, rests with Trump. U.S. and Canadian officials have been negotiating continuously. The U.S. government is pressuring Canada to lift its retaliatory measures from last year’s tariffs, including bans on U.S. alcohol in Canadian provinces and tariffs on U.S. cars. Canada hopes the U.S. will lower tariffs on cars and other goods. Two sources said the emerging agreement might include Canadian concessions on dairy tariff quotas—a frequent topic in Trump’s criticisms of Canada’s trade policies.



On August 18 local time, Iranian Foreign Minister Araghchi stated that recent conflicts have shown that countries without U.S. military bases suffer less damage, and that U.S. bases cannot even protect their own interests against resistance forces. Araghchi highlighted that Qatar and Pakistan played an effective mediating role between Iran and the U.S., and that Tehran-Qatar relations are now at a very good stage. He stressed that the Middle East’s new security vision must be based on “common security” and resolving economic imbalances. Without all-round cooperation, the Persian Gulf region will not achieve lasting peace. (CCTV News)



According to The Washington Post, citing sources, the U.S. Department of Defense is considering scaling back its military presence in the Gulf after the conflict with Iran ends, as Iranian strikes revealed the defensive shortcomings of the main U.S. bases. Alternative plans include redeploying forces westward to Jordan, Israel, or Saudi Arabia instead of rebuilding damaged facilities. No formal decision has been made.



Mustafa Izadi, Deputy Commander of the Islamic Revolutionary Guard Corps, recently stated that the U.S. once considered applying the "Venezuela model" to Iran, but ultimately failed. According to the IRGC's news website on the 18th, Izadi said the U.S. formulated plans to overthrow and "dismember" the Iranian government, even considering the "Venezuela model" for Iran, but ultimately failed to achieve its objectives and suffered defeats in multiple areas. He said U.S. air power suffered major losses, with more than 200 U.S. aircraft (including drones and manned aircraft) downed. Public data show that most young Americans oppose war against Iran. (Xinhua News Agency)



On August 18 local time, Majed Al Ansari, spokesperson for Qatar’s Ministry of Foreign Affairs, stated that current Qatari diplomatic efforts are focused on de-escalating the crisis, preventing further escalation, achieving a U.S.-Iran ceasefire, reopening the Strait of Hormuz, and ensuring freedom of navigation, while promoting both sides to return to the negotiating table. Al Ansari said that Qatar and Pakistan previously mediated memorandums of understanding between the U.S. and Iran, and Qatar is working to restart talks and implement the memorandum, though ceasefire violations have prevented full implementation. Currently, Qatar is waiting for Oman and Iran to reach an agreement on the Strait of Hormuz issue, with the hope that this would revive negotiations and prevent further escalation. The priority is to reach an agreement that can ensure both the reopening of the Strait and a ceasefire. Qatar will continue to urge all parties to return to talks to implement the previously agreed memorandum or a peace-deal to end the war. (CCTV News)

Domestic News

The State Council has issued a decision to amend the Regulations on the Management of the Housing Provident Fund. The changes include amending Article 6 to: "The deposit and loan interest rates of the housing provident fund shall be determined by the State Council." Also, the phrase "the housing provident fund may be used to purchase treasury bonds" in the first paragraph of Article 28 is amended to "the housing provident fund may be used to purchase treasury bonds and policy-based financial bonds." (Chinese Government Net)



At the press conference held by the State Council Information Office on the 19th, officials from the Ministry of Commerce stated that a commercial network covering both urban and rural areas will be progressively established to support urban-rural integration and comprehensive rural revitalization. Assistant Minister of Commerce Yuan Xiaoming stated that the ministry will promote the construction of a modern rural circulation system, conform to the trend of urban-rural integration, and upgrade commercial networks. At the same time, it will upgrade circulation methods, expand rural e-commerce application scenarios, improve supply chain coordination, extend the industrial chain, and enhance the value chain. Additionally, the ministry will adapt to the trend of chain brands entering lower-tier markets, upgrade service formats, and support chain brands in innovating localized business models. Both local and foreign brands are encouraged to compete and cooperate positively, promoting increasing diversity in service sectors. Assistant Minister Yuan Xiaoming: Since 2021, we have promoted the construction of county commercial systems, building or upgrading 3,159 county-level comprehensive commercial service centers, 15,000 township commercial centers, and 168,000 village convenience stores. Nationwide, full coverage of commercial outlets at the county, township, and village levels has basically been achieved. Over 3,600 county-township logistics distribution outlets have been supported for upgrades and renovations, with over 100 million parcels entering and leaving rural areas daily, driving the transformation and upgrade of agricultural product supply chains. Nearly 4,000 facilities for sorting, pre-cooling, and initial processing of agricultural products have been supported. (CCTV News)