US Stocks Slip as Oil Climbs; Chip Shares Rise on AI Optimism

Middle East tensions push the 10-year Treasury yield back above 4.7%

Rate-hike expectations have eased, but oil remains a drag

US stocks traded lower on August 17 as rising oil prices and another increase in long-term Treasury yields weighed on sentiment. Technology shares, including semiconductor stocks, advanced as Bloomberg reported a surge in revenue at AI startup Anthropic, fueling optimism about artificial intelligence.

As of 10:15 a.m. in New York, the S&P 500 was down 0.1% and the Dow Jones Industrial Average had fallen 0.2%. The Nasdaq 100 rose 0.2% as semiconductor shares turned higher again.

Micron gained more than 4% to $1,017, while SK Hynix ADRs climbed nearly 4% to $173. SanDisk rose more than 6%, and Broadcom and Nvidia also advanced.

Optimism around AI hardware shares spread after Bloomberg reported that Anthropic posted second-quarter revenue of $11.5 billion, up 14-fold from a year earlier, and recorded its first quarterly operating profit.

Oil edged higher after President Donald Trump threatened to bomb Oman if it joined the conflict. An Iranian senior official said tensions would escalate in the Strait of Hormuz and the broader region if diplomatic efforts fail.

West Texas Intermediate crude futures rose 0.5% to $83 a barrel. Brent crude, the international benchmark, traded around $89 a barrel.

Despite relatively subdued inflation data last week that reduced expectations for a Federal Reserve rate increase, the 10-year Treasury yield rose 1 basis point to 4.70% on August 17, moving back above 4.7%.

The S&P 500 hit a record high last week on strong corporate earnings. Those results helped sustain gains in US equities despite geopolitical tensions in the Middle East. CNBC reported that weak retail sales data and relatively mild inflation readings also lowered expectations for a Fed rate increase next month, helping drive the latest all-time high.

Lori McPherson, chief market strategist at Len Sterling, told CNBC on August 17 that shifting expectations for rate increases had affected some technology shares. That helps explain why tech stocks lagged in July despite strong earnings, but have rallied sharply more recently.

Still, renewed instability in the Middle East, along with oil prices and the benchmark 10-year Treasury yield climbing above 4.7%, appeared to weigh on investors on August 17.

No major economic data is due this week, and the Fed is scheduled to release the minutes of its latest meeting on August 19. Home Depot and Lowe's are set to report earnings on August 18 and August 19, while Walmart is due on August 20.

Kim Jeong-a, guest reporter, Hankyung.com, kja@hankyung.com