Bond Selloff Drives Risk Aversion, US-Iran Peace Prospects Dim | The Opening Trade 8/18/2026

Summary

Global bond yields are surging to multi-decade highs, driven by a confluence of factors including sticky inflation, expanding government deficits, and massive debt issuance from AI companies. The rising cost of capital is beginning to weigh on equity markets, prompting a risk-off sentiment among investors. Meanwhile, oil prices continue to climb as geopolitical tensions in the Middle East show no signs of abating, further complicating the inflation outlook for central banks.

• Long-dated bond yields in the US and Europe reach their highest levels in over a decade.
• AI companies like Anthropic are generating massive revenue growth and issuing debt that competes with sovereign bonds.
• Oil and diesel prices extend their climb as prospects for a US-Iran peace deal diminish.
• Rising input costs and extreme weather events threaten to drive food price inflation higher later in the year.
• BHP reports strong profits and outlines plans to boost copper production by 50% over the next five years.
• Strategists maintain a constructive view on US equities, citing record corporate profit margins and adaptability.