Global stock futures were mostly flat on Friday after a sharp Wall Street sell-off, driven by rising U.S. Treasury yields and inflation fears, with major indices poised for weekly declines. While bond market interventions and ongoing U.S.-Iran tensions weighed on crude oil prices, gold rallied for its third straight week. Japan also reported its highest inflation rate this year due to energy costs, even as Ross Stores’ strong earnings provided a positive note for investors.
Stock futures showed minimal movement early Friday, following a significant market downturn on Wall Street that has positioned major U.S. averages for weekly losses. This broader sell-off was primarily ignited by a renewed ascent in long-dated U.S. Treasury yields, stirring investor anxieties about inflation despite government interventions.
A trader works on the floor of the New York Stock Exchange during morning trading on August 18, 2026 in New York City. Michael M. Santiago | Getty Images
S&P 500 futures hovered around flat, while Nasdaq-100 futures recorded a slight 0.2% gain. However, the previous day's trading saw the S&P 500 and Nasdaq Composite drop by 0.9% and 1% respectively. This setback places the S&P 500 down 1.9% for the week and the Nasdaq off by 2.5%, potentially ending a three-week winning streak. The Dow Jones Industrial Average has also declined 1.8% week-to-date, headed for its second consecutive weekly loss.
Asian markets presented a mixed picture. Japan's Nikkei 225 dipped 0.39%, while the Topix remained stable. South Korea's Kospi recovered from earlier declines to rise 0.80%, although its small-cap Kosdaq index sharply fell by 4.73%. Australia's benchmark S&P/ASX 200 was 0.31% lower, while Hong Kong's Hang Seng index edged up 0.72%, and mainland China's CSI 300 gained 0.52%.
Treasury Yields and U.S. Bond Market Intervention
The recent market losses were largely attributed to a resurgence in long-dated U.S. Treasury yields. Efforts by the government to stabilize the bond market have not fully quelled investor concerns about inflation and the efficacy of these measures. Ulrike Hoffmann-Burchardi, chief investment officer of the Americas at UBS, noted, "The operation reshapes the maturity profile of debt held by investors rather than reducing the amount of debt markets must absorb. It neither removes the government's financing needs nor resolves concerns about Treasury supply."
Echoing this sentiment, James Sullivan, JPMorgan's co-head of global fundamental research, likened the U.S. Treasury's strategy of buying back longer-duration bonds and issuing shorter-dated bills to "paying your mortgage with your credit card." He suggested this approach merely postpones the problem, as the surge in global debt issuance continues to challenge investor demand. U.S. Treasury Secretary Scott Bessent had announced on Wednesday an intention to at least double the size of government debt buybacks, commencing September 9.
Oil and Gold Market Dynamics
Oil prices saw a slight decline on Friday as markets continued to assess the protracted U.S.-Iran conflict. Brent crude futures fell 0.38% to $93.42 a barrel, and U.S. West Texas Intermediate crude futures slipped 0.55% to $86.35 per barrel. U.S. Vice President JD Vance emphasized that economic pressure remains Washington's most effective tool against Iran, describing the situation as a "delicate dance." His remarks followed President Donald Trump's past threat of severe economic operations against Tehran and its allies.
Conversely, gold prices advanced, heading for their third consecutive weekly gain. This was largely supported by a weaker dollar, which stemmed from the Treasury's bond market intervention. Spot gold traded 0.64% higher at $4,546.88 per ounce, with gold futures up 0.85% at $4,610 per ounce. The Treasury's liquidity-support announcement had pushed the greenback lower, providing a boost to the precious metal.
Japan's Inflation and Corporate Earnings
Japan's headline inflation rate reached 1.9% in July, marking the highest level this year, primarily driven by rising energy costs exacerbated by the Iran conflict. Core inflation, excluding fresh food but including energy, matched expectations at 1.8%. Energy prices rose for the first time since November 2025, contributing to a wholesale inflation rate of 7.2% for July, with electricity charges being a major factor.
In corporate news, Ross Stores shares surged over 7% in after-hours trading after the discount retailer reported better-than-expected results for its second quarter. The company posted adjusted earnings of $2.06 per share on revenue of $6.26 billion, surpassing analyst expectations of $1.95 per share and $6.16 billion, respectively. Ross Stores also issued an optimistic full-year earnings guidance.
