Stocks Mixed as Crude Oil Prices and Bond Yields Fall

Rich Asplund

Mon, May 18, 2026 at 10:05 AM EDT 7 min read

The S&P 500 Index ($SPX) (SPY) today is up +0.07%, the Dow Jones Industrial Average ($DOWI) (DIA) is up +0.29%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.25%.  June E-mini S&P futures (ESM26) are up +0.10%, and June E-mini Nasdaq futures (NQM26) are down -0.17%.

Stock index futures recovered from overnight losses and are trading mixed as crude oil prices fell more than -1% on hopes for a breakthrough in the standoff between the US and Iran over the Strait of Hormuz.  Crude prices retreated today after Tasnim, Iran's semi-official news agency, reported that the US has proposed a temporary waiver on Iran oil sanctions until a final peace agreement is reached.  T-note yields gave up an early advance and also turned lower on the news.

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Stocks initially were under pressure today as the stalemate between the US and Iran keeps driving crude oil prices and bond yields higher.  Comments from President Trump on Sunday weighed on stocks and boosted crude oil prices when he said the "clock is ticking" on Iran and it "better get moving FAST on a peace deal, or there won't be anything left of them."  Also, ramped-up geopolitical tensions weighed on stocks after Reuters reported that Pakistan has deployed 8,000 troops, a squadron of fighter jets, and an air defense system to Saudi Arabia as part of a mutual defense pact, a deployment described as a "substantial, combat-capable force" to support Saudi Arabia if it comes under further attack.

Weaker-than-expected economic news from China is bearish for global growth prospects.  China Apr industrial production rose +4.1% y/y, weaker than expectations of +6.0% y/y. Also, China Apr retail sales rose +0.2% y/y, weaker than expectations of +2.0% y/y.  In addition, China Apr new home prices fell -0.19% y/y, the thirty-fifth consecutive month that prices have declined.

WTI crude oil prices (CLM26) fell from a 2-week high today and turned lower after Tasnim, Iran's semi-official reporting agency, said the US has proposed a temporary waiver on Iran oil sanctions until a final peace agreement is reached.  Crude prices initially rose today after Reuters reported that Pakistan has deployed troops and jets to Saudi Arabia as part of a mutual defense pact. On Sunday, the United Arab Emirates (UAE) reported that a drone sparked a fire in a power station at the UAE’s Barakah nuclear plant, and Saudi Arabia said it intercepted and destroyed three drones that entered its airspace.  Last Wednesday, the International Energy Agency (IEA) said in a monthly report that global oil inventories declined at a rate of about 4 million bpd in March and April, and the market will remain “severely undersupplied” until October even if the conflict ends next month.  Goldman Sachs estimates that the current disruption has drawn down nearly 500 million bbl from global crude stockpiles, with the drawdown potentially reaching 1 billion bbl by June.