Premium Subscriber Insights: SPR Exclusive Insights (Delayed Release)
Date: Sun, Aug 23, 2026 at 12:46 PM
Subject: August Market Update: Market Returns to a Consolidation Phase as Oil and Treasury Yields Rise
Dear SPR Premium Subscribers,
As the U.S. equity market entered the third week of August, the strong upward momentum that had continued since early August finally paused, and the market closed the week lower.
Until last week, we had expected the market to continue moving within a broad consolidation range through the end of August, with the possibility of a short-term move toward the upper end of that range. However, this week, the market began to lose momentum as the key catalyst behind the early-August rally — the anticipated reopening agreement for the Strait of Hormuz between the United States and Iran — remained unresolved and increasingly uncertain.
In particular, the continued uncertainty surrounding the reopening of the Strait of Hormuz once again pushed crude oil prices higher, while concerns over inflation and rising Treasury yields simultaneously returned to the market.
The most significant factor pressuring the market during the first half of this week was the sharp resurgence in U.S. Treasury yields.
The 30-year U.S. Treasury yield rose to its highest level in nearly two decades. At the same time, the expiration of the understanding between the United States and Iran renewed concerns over potential supply disruptions, pushing both Brent crude and WTI prices higher.
Despite an unusual Treasury purchase program by the U.S. Treasury aimed at reducing borrowing costs, upward pressure on yields intensified throughout the week. On Thursday, the market experienced another sharp decline as weaker-than-expected retail-sector data added to the pressure.
Although the market rebounded on Friday following the release of stronger economic activity data, the recovery was not sufficient to reverse the weekly decline.
Ultimately, this week's decline appears to represent more than a simple technical correction. Rather, it reflects a partial deterioration in confidence in the underlying buying support that had driven the market sharply higher since early August.
The primary catalysts behind the early-August rally were expectations of a reopening agreement for the Strait of Hormuz, the resulting decline in oil prices, easing inflation concerns, and expectations for a more accommodative interest-rate environment.
However, as time has passed without any concrete agreement or visible progress, these expectations have gradually weakened. As a result, the market has begun to return toward the consolidation and correction scenario that we had originally anticipated before the early-August rally.
Nevertheless, an important point is that the broader medium- to long-term trend structure has not yet been materially damaged.
Instead, this week's decline has significantly reduced the possibility that expectations for easier monetary policy in September will be aggressively priced in ahead of time. In other words, some of the expectations that had been partially reflected in asset prices during the recent rally are now being adjusted.
From this perspective, the current decline can also be interpreted as a process in which some of the downside risk that could have emerged in September is being partially priced into the market earlier.
At present, the most important chain of factors continuing to influence the market can be summarized as follows:
U.S.-Iran tensions → Uncertainty surrounding the reopening of the Strait of Hormuz → Higher crude oil prices → Renewed inflation pressure → Concerns over a tighter monetary environment → Higher Treasury yields → Weaker sentiment toward growth and technology stocks
This chain has not yet been resolved. Therefore, rather than moving consistently in one direction, the market is likely to remain highly sensitive to news developments and supply-demand changes, resulting in continued volatility with repeated upward and downward movements.
Furthermore, repeated announcements from President Trump and U.S. officials have not yet been followed by concrete results. As a result, market confidence in these announcements appears to be gradually weakening.
Investor fatigue is also increasing.
Until a verifiable outcome, such as an actual agreement, ceasefire, or meaningful progress toward reopening the Strait of Hormuz, is confirmed, it will likely remain difficult for the market to establish a strong and sustainable bullish foundation based solely on statements or expectations.
Therefore, for now, we continue to expect an uncertain, range-bound market through the end of August, with repeated upward and downward movements within the broader consolidation range.
However, following this week's decline, the possibility of another strong move toward the upper end of the previously anticipated range has been significantly reduced. The market may instead require more time for consolidation, correction, and stabilization of buying and selling pressure.
This development remains consistent with the broader monthly trend structure that we have discussed in our previous reports.
At the current stage, we believe that the market is likely to remain in an uncertain and corrective environment through September rather than immediately establishing a clear directional trend. A more specific and sustainable upward direction is currently more likely to become visible around October.
Therefore, rather than aggressively chasing short-term rebounds or sharp rallies driven by individual news events, we believe it is more important to monitor whether the underlying external risks are actually being resolved.
In particular, we will be closely watching whether crude oil prices and Treasury yields stabilize, and whether buying pressure can recover and remain consistently strong once these external pressures begin to ease.
Until these conditions are confirmed, maintaining a disciplined and selective approach is likely to be more appropriate than aggressively increasing exposure.
SPR will continue to closely monitor developments surrounding the United States and Iran, the Strait of Hormuz, crude oil prices, Treasury yields, and the resulting changes in market supply and demand.
If any meaningful development occurs or if the current market outlook changes materially, we will provide an additional update as quickly as possible.
Thank you, as always, for your continued trust and support of SPR Premium.
If you have any questions regarding this analysis or would like further clarification, please feel free to contact us at any time.
Thank you.
SPRㅣ Stock Pretiming Report team.
All forecasts are probabilistic and subject to change as market conditions evolve. Investment decisions remain solely the responsibility of each investor.)
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