US Stock Market Trend (August 11): Oil Prices Surge, US Treasury Yields Climb, Tech Stocks Under Pressure, Optical Communication Stocks Plunge

Written by: TechFlow Research

The three major US stock indices closed slightly lower on Monday, with the S&P 500 and Dow Jones falling back from last Friday's record highs. The factors dragging down the broader market were the delayed agreement on reopening the Strait of Hormuz, oil prices surging over 5% in a single day, rising US Treasury yields, and pressure on tech stock valuations. Following news of Nvidia's $500 billion AI financing, it fell nearly 3% instead, the optical communication sector plummeted collectively, with Coherent dropping over 14%. Chinese concept stocks strengthened against the trend, with the Nasdaq China Golden Dragon Index rising nearly 2%, becoming a rare highlight in Monday's trading. Oil prices have once again become the pricing center, and market concerns about inflation and interest rates are heating up.

Hormuz Agreement Remains Unresolved, Oil Prices Surge and US Treasury Yields Climb

The core variable on Monday was oil prices. Signals released by Iran over the weekend indicated that even if an agreement is reached, it does not mean the Strait of Hormuz will immediately resume navigation. On Monday, Trump stated on social media that he noticed Iran is demanding compensation for losses suffered during the past five months of military conflict, he is also demanding compensation from Iran, and has instructed that this requirement be included in all future negotiations. Trump also claimed that the US military has "100% control" of the Strait of Hormuz, the strait is "now open," but Iran occasionally still lays mines, which the US military will clear.

With the agreement outlook unclear, oil prices surged in response. WTI September crude oil futures closed up 5.05% at $82.13 per barrel, Brent October crude oil futures closed up 4.99% at $87.72 per barrel, both hitting new highs within August. Brent crude oil has risen for four consecutive trading days. The US Strategic Petroleum Reserve fell below 300 million barrels for the first time since 1983, further exacerbating tight supply expectations.

The surge in oil prices directly pushed up US Treasury yields. The 10-year US Treasury yield closed near 4.71%, rising about 6 basis points during the day; the 2-year US Treasury yield was about 4.24%, rising about 4 basis points during the day. As yields rose, the valuation discount rate for growth stocks increased accordingly, with tech stocks bearing the brunt.

Tech Stocks Under Pressure, Nvidia's $500 Billion Financing News Becomes a Burden Instead

The Magnificent Seven showed significant divergence on Monday. Microsoft and Amazon both rose over 1%, benefiting from safe-haven funds concentrating on leaders with more stable cash flows. Apple fell 1.5%, downgraded by multiple institutions, with six institutions issuing sell signals, the most since 2012. Nvidia closed down nearly 3%, Google Class A fell about 0.5%, Meta fell about 0.3%, and Tesla fell about 0.8%.

Nvidia's decline was somewhat counterintuitive. On the news front, Nvidia is seeking to join forces with Wall Street giants such as Apollo, Blackstone, BlackRock's GIP, Brookfield, Goldman Sachs, and KKR to raise up to $500 billion in funds for AI infrastructure projects in the form of a consortium, with funds coming entirely from third-party capital. However, the market seems more concerned about the signal behind the expanded financing scale; capital expenditure demands for AI infrastructure are still expanding, while financing costs are rising. After the news broke, Nvidia's credit default swap prices hit the largest single-day increase in two weeks, and concern from the bond market transmitted to the stock price.

Intel announced plans for a $15 billion secondary offering of common stock, closing down over 4%. Launching a large-scale secondary offering against the backdrop of already high stock prices, the market voted with its feet.

Optical Communication Sector Plummets, Storage Stocks Mixed

The optical communication sector encountered a significant pullback on Monday. Coherent fell over 14%, and Lumentum fell over 8%. Optical communication had previously accumulated significant gains, and funds chose to take profits when the macro environment tightened.

Performance within the storage sector was mixed. SanDisk rose over 2%, while SK Hynix and Seagate Technology fell over 1%. SK Hynix announced it will build new wafer fabs in Yongin and Cheongju, South Korea, with a total investment of about 54 trillion won, approximately $38.4 billion. News of large-scale capacity expansion failed to boost stock prices, as market judgments on the supply-demand relationship and capital expenditure efficiency of storage chips remain divergent.

The PHILX Semiconductor Sector Index closed down about 1.2% on Monday, specific values were not listed separately in Monday's closing report. Chip stocks were under pressure overall; the sharp fall in optical communication combined with Intel's secondary offering news caused the semiconductor sector to underperform the broader market overall.

Chinese Concept Stocks Strengthen Against the Trend, Outperforming the Broader Market for Consecutive Trading Days

While US stocks were under pressure overall, Chinese concept stocks became a rare highlight on Monday. The Nasdaq China Golden Dragon Index rose nearly 2%, having outperformed the broader US stock market for consecutive trading days. Alibaba closed up about 3%, leading Chinese concept stocks.

Global funds seem to have adopted a different pricing logic for Chinese concept stocks amidst macro uncertainty; the weight of geopolitical risks and the interest rate environment on Chinese concept stocks is declining, with individual fundamentals and valuation becoming more dominant factors. Whether the trend of Chinese concept stocks continuously outperforming can continue is a window for observing capital flows in the future.

Gold Rises for Second Consecutive Day, Bitcoin Falls Below $64,000

Gold rose for the second consecutive trading day. Spot gold rose 1.1% to $4,389.29 per ounce, rising over 1% at one point during the session, hitting a new high in over two months. Spot silver rose 3.57% to $65.75 per ounce. The surge in oil prices pushed up inflation expectations, and gold was favored by funds as a hedging tool.

Bitcoin fell below $64,000 during the session, down over 2% from the daily high; Ethereum traded near $1,890, down about 1% in 24 hours. The US Dollar Index rebounded, moving away from a one-and-a-half-month low. The Japanese Yen once fell 1% to a low within August. The offshore Renminbi temporarily moved away from a three-year high. With oil prices surging and interest rate expectations heating up, funds are readjusting positions.

Tuesday Focus: Calm Window Before CPI

No important economic data will be released in the US on Tuesday, and the market will continue to digest the impact of rising oil prices and climbing yields. Oil price trends remain the largest uncertain variable; mutual compensation demands between Trump and Iran make Hormuz negotiations more complex. The market will closely follow subsequent news on Nvidia's $500 billion financing plan, and whether optical communication stocks such as Coherent can stop falling and stabilize.