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      Dow Jones Plummets Nearly 700 Points Amid Rising Yields and Oil Prices

      On August 20, the Dow Jones Industrial Average experienced a significant decline, dropping nearly 700 points, or approximately 1.3%. The S&P 500 and Nasdaq also faced losses, falling 0.8% and 1% respectively. This downturn occurred just one day after the U.S. Treasury announced an increase in its buyback operations for longer-dated bonds, aimed at injecting liquidity into the market and lowering yields.

      The Treasury's plan, revealed on August 19, involved doubling the size of its bond buyback operations from $2 billion to at least $4 billion per operation, targeting longer-dated government bonds from September through early November. Initially, this announcement led to a decrease in yields on 30-year Treasury bonds from around 5.26% to 5.18%. However, by August 20, yields rebounded, contributing to the selloff in equities.

      The buyback initiative struggled to make a lasting impact against the backdrop of a national debt exceeding $40 trillion. Additionally, rising oil prices, driven by geopolitical tensions involving Iran, further complicated the economic landscape. Increased oil prices contribute to inflation expectations, which in turn elevate bond yields and pressure stock valuations, particularly affecting growth stocks and speculative assets.

      © 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

      Source: KLEA News

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