Full Breakdown
U.S.–Iran Truce Expiration Spurs Mixed Market Reactions
8/18/2026, 3:52:56 AM
Truce Expiration and Military Posture Shift
On August 18, the 60-day cease-fire between the United States and Iran ended. Tehran announced that it would move to a “fully offensive” military posture. President Donald Trump subsequently reaffirmed that he was not interested in extending the truce. The expiration and Tehran’s statement were the primary catalysts for the day’s market movements across Asia and the United States.
Market Data Highlights
- Oil: Brent crude futures rose 0.2% to $91.06 a barrel, climbing more than $2 on the day following the truce’s end.
- U.S. Treasury yields: The 10-year yield increased 0.8 basis points to 4.728%; the 30-year rose 0.6 basis points to 5.3146%, the highest level in over two decades.
- Japanese bonds: The 10-year JGB yield jumped 2.5 basis points to 2.945%, also a three-decade high.
- Equities: MSCI’s broadest Asia-Pacific index (excluding Japan) was up 0.8%; South Korea’s KOSPI gained more than 3%, while Japan’s Nikkei 225 fell 0.3%. In the United States, S&P 500 e-mini futures were flat, the S&P 500 slipped 0.5% overnight, and the Nasdaq Composite edged down 0.3%.
- Currency and commodities: The dollar index hovered near a two-month low of 99.527. Gold rose 0.1% to $4,420.07, and cryptocurrencies showed modest gains (bitcoin +0.1% at $64,398.48; ether +0.3% at $1,911.40).
Official Statements and Analyst Views
- Tehran’s declaration of a “fully offensive” stance was reported as a direct shift in its military policy.
- President Trump’s reiterated lack of interest in prolonging the truce was cited as a factor influencing market sentiment.
- ING analysts noted that moves above a 4.65% yield on the U.S. 10-year bond have historically prompted reassuring comments from the Trump administration, but “we’re not hearing the same” this time.
- Westpac analysts described the overall market tone as “risk-off,” linking it to Trump’s stance and heightened Middle-East tensions.
Implications for Global Markets
The combination of a renewed geopolitical risk premium and higher U.S. Treasury yields contributed to a cautious trading environment. Elevated oil prices reflected renewed supply concerns, while bond markets reacted to the higher yield environment. Equity indices displayed divergent performance, with South Korea’s market rallying after a holiday and Japan’s benchmark slipping. The muted response in U.S. equity futures suggests investors are weighing the potential for further escalation against broader macroeconomic factors, including soft U.S. economic data and expectations for Federal Reserve policy.
