U.S. equity markets turned risk-off on Tuesday, August 18, 2026, as rising long-term Treasury yields and a jump in oil prices to three-week highs sparked a sharp pullback in semiconductor and AI-related shares. The PHLX Semiconductor Index dropped about 3.7%. Nvidia fell roughly 2%, while Micron reversed Monday’s advance with a decline of around 6%. In premarket trading, Coherent lost 6.8% after gaining 7.8% on Monday, and Fabrinet tumbled 9–10% despite reporting fourth-quarter revenue of $1.32 billion, up 45.1% year over year, and guiding next-quarter revenue above consensus.
Against that backdrop, Home Depot provided a positive outlier, rising 1.8% after posting second-quarter revenue of $47.86 billion and adjusted earnings of $4.92 per share, both above Wall Street estimates. U.S. comparable sales rose 1.3%. Klarna cut its 2026 revenue outlook to between $4.08 billion and $4.16 billion from about $4.34 billion, citing weakness in Germany, and its shares fell sharply even though second-quarter revenue rose 27% and it reported an unexpected profit. Oil prices rose to three-week highs as U.S.-Iran nuclear negotiations appeared to stall, adding to concerns that higher energy costs could keep inflation elevated and complicate Federal Reserve rate cuts.
Other notable movers included Flexsteel, up about 10% on strong earnings and guidance, and Duos Technologies, up 8% after reporting nearly 30% year-over-year revenue growth. Baidu fell 5.2% after a drop in second-quarter profit and revenue. Although no major cryptocurrencies were directly named, the macro backdrop of higher yields and oil-driven inflation risks is broadly negative for risk assets, including crypto.
