Oil Prices Slide, Easing Bond Market Worries and Boosting Stocks

Oil prices continued to fall on Tuesday, August 25, 2026, which helped ease worries in the bond market and support stock prices. The S&P 500 rose 0.3% and edged closer to its all-time high set earlier this month.

The drop in oil prices came despite tensions between the US and Iran seeming to rise after the Trump administration announced new sanctions. A delegation from Pakistan left Iran on Tuesday after talks with Iranian President Masoud Pezeshkian on reopening the Strait of Hormuz and reviving negotiations to end the Iran-US conflict.

The fall in oil prices also helped rein in worries about high inflation, which had driven Treasury yields higher through the summer. The yield on the 10-year Treasury fell to 4.63% from 4.70% late Monday.