Persistent U.S. Fiscal Imbalances and Resurgent Inflation Keep Stocks Under Pressure

Barry Adams
24 Aug, 2026
New York City

U.S. stocks turned lower at the start of a new week of trading on Monday amid elevated global bond yields and tensions in the Middle East. 

The S&P 500 Index decreased 0.2%, and the tech-focused Nasdaq Composite declined 0.3%. 

The yield on 10-year U.S. Treasury notes held at 4.71%, and the West Texas Intermediate crude oil price per barrel eased 1% to $92.78. 

Long-term sovereign borrowing costs soared to multi-decade highs across the U.S., Europe, and Japan, fueled by surging government fiscal deficits and corporate debt issuance for AI infrastructure competing for investor capital.  

Stocks have been under pressure around the world by rising global bond yields last week, as the U.S. 30-year bond yield rose to a 19-year high of 5.3%. 

Moreover, rates in Japan soared to a three-decade high, and in Germany and France advanced to multi-year highs. 

Investors are increasingly factoring in higher energy prices as the U.S.-Iran conflict shows no sign of easing, and shipments through the Strait of Hormuz are likely to be disrupted longer than previously estimated. 

Broader indexes remained resilient despite the resurgent global bond yields, as investors continued to focus on earnings growth and overlook rising interest rates. 

Despite higher nominal consumer prices and bond yields, investors are betting that continued economic growth and strong earnings will support the stock market.  

The U.S. federal government debt crossed $40 trillion, a new record high, as lawmakers overlook the long-term consequences of rapidly rising overall debt and its impact on borrowing costs and pressure on the U.S. dollar. 

 

U.S. Movers 

Alibaba Group Holding decreased 8.6% to $119.34 after the online platform operator priced its secondary offering worth HK $80 billion, or $10.2 billion, to non-U.S. investors. 

The company places 710 million shares at a price of HK $112.70 each, compared with the stock's Friday closing price of HK $123.0.

The company plans to use all proceeds from the newly issued shares to ramp up its AI capabilities and expand and enhance its artificial intelligence infrastructure. 

The offering is scheduled to close on Wednesday, and earlier in the month the company reported a 75% drop in its June quarter earnings as capital expenditure soared 75% to 68 billion yuan.    

Shein, the China-based fast fashion retailer, said it plans to raise as much as HK13.86 billion, or $1.8 billion, according to a filing approved by the China Securities Regulatory Commission. 

The company plans to sell 280 million class B shares, priced between HK $47.60 and $49.50 per share, valuing the company at US $27 billion at the top of its pricing range.   

The company's valuation is sharply lower than previous offering rounds and fell from $98.2 billion in a private fundraising round in 2022. 

The company's stock is expected to start trading as early as September 1 on the Hong Kong Stock Exchange.