US Equity Indexes Fall as Treasury Yields Rise After Manufacturing Gauge Hits 39-Month High

12:45 PM EDT, 08/21/2025 (MT Newswires) -- US equity indexes fell after midday Thursday as a surge in an S&P Global gauge of manufacturing conditions to a 39-month high in August helped facilitate curve-wide gains in government bond yields.

The Nasdaq Composite declined 0.5% to 21,070.6, with the S&P 500 down 0.5% to 6,365.2 and the Dow Jones Industrial Average 0.5% lower at 44,733.5. All sectors except energy, healthcare, and materials fell intraday. Classic growth sectors, consumer discretionary, communication services, and technology, continued to decline.

In economic news, the August flash reading of US manufacturing conditions from S&P Global rose to 53.3 from 49.8 in July, compared with an expected reading of 49.7 in a survey compiled by Bloomberg.

The pace of US existing home sales rose by 2% to a 4.01 million seasonally adjusted annual rate in July from 3.93 million in June, compared with an expected decrease to a 3.92 million rate in a survey compiled by Bloomberg, data from the National Association of Realtors released Thursday showed.

For the week ended Aug. 16, the seasonally adjusted number of initial jobless claims increased to 235,000 from the previous week's unrevised reading of 224,000, according to the Department of Labor. The consensus was for a smaller gain to a level of 225,000 in a Bloomberg poll. The four-week moving average totaled 226,250, rising by 4,500 from the prior week's unrevised average.

"Job growth has slowed, but we do not see any evidence of increased slack in the labor market either," Jefferies Chief US Economist Thomas Simons said in a note. "The sideways drift in initial and continuing claims in recent months suggests that layoff activity is muted. The 'no hire/no fire' theme in the labor market remains firmly intact."

By Thursday afternoon, the odds of a 25-basis-point cut in September stood at 79%, down from 92% a week ago, according to the CME FedWatch Tool. The remaining 21% probability is for the rates to remain unchanged, versus 7.9% a week earlier.

Most US Treasury yields rose, with the 10-year yield up 4.9 basis points to 4.35% and the two-year rate climbed 5.8 basis points to 3.8%.

In earnings news, Walmart (WMT) shares dropped 4.5% intraday, among the worst performers on the S&P 500 and the Nasdaq, after the company reported fiscal Q2 adjusted earnings below analysts' expectations.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.