Oil Back on the Rise, Along With Treasury Yields: 8 Key Items Shaping the Stock Market Tuesday

These are the early headlines and other items poised to influence the market at the start of the trading day. As we share this collection of market drivers, futures point to a down market when U.S. equities start trading later this morning. 

1. A selloff in U.S. government bonds picked up pace on Tuesday, sending the 30-year Treasury yield to a near two-decade high as fears ‌of an escalation in the Middle East war fueled inflation worries and pressured stocks. Oil prices also climbed for the third consecutive day, with Brent crude hitting its highest since late last month after the latest signals from Washington and Tehran crushed hopes of an imminent end to the conflict. (Reuters)

Iran said it would shift to a “fully offensive” military posture because efforts to negotiate a permanent end to the war with the U.S. have stalled, a senior Iranian official told Reuters. Washington, too, has ruled out extending a temporary ceasefire agreement that expired on August 17. (Reuters)

The above explains why U.S equity futures are in the red on Tuesday morning and, if military action increases, odds are high that oil and related prices will climb, renewing inflation pressures. Should that come to pass, it would spur the market into yet another re-think about monetary policy action by the Fed and other central banks. Granted, Treasury yields have moved higher, but rising uncertainty tends to drive knee-jerk reactions, especially in what has been a complacent stock market. 

Meanwhile, President Trump’s approval rating has fallen to 33%, the lowest of his presidency per the latest Reuters-Ipso’s poll. This latest poll also finds “an overwhelming majority of Americans concerned the U.S. war with Iran will last a long time.” Might this lead to moves to shore up mid-term election prospects in the coming weeks? Possible, and that means we will want to keep a very close eye on developments between the U.S. and Iran, and here at home. 

2. Nvidia said on Monday that it had agreed to spend as much as $105 billion to back one of the world’s largest data centers, which is being built in Ohio and will be leased to OpenAI. The sum is one of the largest from Nvidia toward supporting A.I. labs that are seeking more computing power. Jensen Huang, Nvidia’s chief executive, said in a blog post that the company would use the money to guarantee “lease and power payments” at the site. (NY Times)

We’ve shared our view about companies leveraging their balance sheets to fund customers while also ensuring demand for their products. In an Nvidia (NVDA) blog post, its financing for the Ohio data center was discussed as not circular because “OpenAI will pay the lease.” 

A post over at OpenAI said it would lease the site “only as completed capacity becomes available,” meaning it may not pay anything until the data center starts coming online in 2028. While this may not be circular financing, given what we discussed in item one above, this continued financing spree that Nvidia is on will foster some short-term profit taking. However, when we look at the revenue ramp in AI companies and businesses, we continue to see tight capacity ahead. For us here at the Portfolio, we will continue to follow AI adoption and usage metrics, and should we see those usage figures stall, that will be a potential indicator the industry risks excess capacity. 

3. Anthropic PBC is on track to generate annualized revenue of more than $65 billion based on its current performance, according to people familiar with the matter, up more than sevenfold from its pace at the end of last year. The company’s run rate, a metric that projects full-year revenue from a shorter period, hit $65 billion by the end of July… Anthropic reported a preliminary revenue figure of more than $11.5 billion in its latest completed quarter, compared with $787 million in the corresponding period in 2025, according to documents seen by Bloomberg News. It also reported positive adjusted operating income for the quarter, the documents show. (Reuters)

Quite the revenue ramp and one that not only reaffirms the thinking behind AI adoption and usage, but also tight capacity. Odds are that, between Anthropic and OpenAI, and their dueling for investor mind space, we will continue to see similar reports leading up to and through Anthropic’s upcoming IPO roadshow. The question we have is whether the offering will be one that lands in September or October.

4. Meta Platforms Inc. is headed to court Tuesday for a high-stakes showdown with a coalition of state attorneys general over claims that the company deliberately designed Facebook and Instagram to encourage compulsive use among young users… After opening statements Tuesday, the trial is expected to take about five weeks. Meta co-founder and Chief Executive Officer Mark Zuckerberg and Instagram head Adam Mosseri are lined up to testify, as are dozens of other witnesses including current and former Meta employees as well as experts in the fields of technology and psychology. (Bloomberg) 

We recognize this event will drive numerous headlines on Tuesday as will the eventual appearance by Meta (META) executives, including Zuck. In the current environment, this likely means META shares will be volatile, but we are prepared for that with our current Three rating. 

As we move through the coming weeks, we will follow developments closely, but as the trial wears on, we suspect Meta is likely to talk more about different revenue streams. Some could be subscription related or hybrid ones like the one at Netflix (NFLX), but the one we are looking to hear more about is the cloud computing one Zuck teased earlier this month that would allow Meta to monetize its data center investments. 

5. Costco sells its dedicated members everything from travel packages to gasoline. Now the retail giant is gearing up to enter a huge new market: Medicare. The warehouse chain plans a limited rollout of Costco-branded Medicare plans, working with SCAN Group, a nonprofit insurer. Nationally, Medicare is a more than $600 billion business for insurers, but the two companies said they would start by selling their jointly named Medicare Advantage products in two states, and a Medicare supplement in a third… The plans will be sold in Costco stores, as well as through normal channels such as insurance agents and websites. The effort will let Costco dip a toe in the water of the Medicare business. (WSJ)

Before we get too excited about this new potential revenue stream at Costco (COST), let’s first consider the company sees this new Medicare effort as a pilot. Does this have the potential to upend the competitive landscape that includes companies like Elevance Health (ELV), United Health (UNH), CVS Health (CVS) and others? It sure does, but for that to happen this Costco initiative will need to move beyond the pilot stage and that means expanding beyond the three initial states, which were not named. Given Costco’s focus on quality and value, and its existing pharmacy business, we wouldn’t rule it out it taking market share from others. 

6. Airlines are locked in a “stand-off” over whether to cut ticket prices as jet fuel costs that soared during the Iran war begin to ease… Air fares remain high, buoyed by fuel surcharges introduced after the start of the conflict. If one carrier cuts, others will be forced to follow to remain competitive, and airlines stung by higher fuel costs are watching rivals closely. (FT)

Given the rebound we are seeing in oil prices that should translate to something similar for gas and jet fuel prices, we are not expecting such ticker price cuts to emerge in the near term. To the extent those prices climb even further, we’ll be looking at not only that impact on inflation but whether airlines add to existing fuel surcharges. 

7. As sweeping U.S. crypto legislation stalls, President Donald Trump’s regulators are set to fill the void, but efforts to write favorable rules for the digital asset industry will be contentious and could be overturned by future administrations… Still, only Congress can create a lasting framework, industry experts say. The Clarity Act aims to define which tokens qualify as securities versus commodities, and which agencies have oversight of the sector. Without legislation, regulations will be vulnerable to the shifting political climate and court challenges, creating lingering hazards for the crypto industry, said executives and analysts. (Reuters)

We’ll add this to the pile of things we are watching, and while we understanding there is interest by many over including crypto in one’s investing arsenal, from our perspective, until the legislation is spelled out, we’ll remain on the sidelines.

8. Economic data today per TipRanks: ADP Employment Change (Weekly), Housing Starts & Building Permits (July), Import/Export Prices (July), NY Fed Services Activity Index (August), Industrial Production & Capacity Utilization (July), Pending Home Sales (July).

Companies reporting today per TipRanks: AM – Baidu (BIDU), Home Depot (HD), Klarna (KLAR). PM – Jack Henry (JKHY), La-Z-Boy (LZB), Toll Brothers (TOL).

At the time of publication, TheStreet Pro Portfolio was long COST, META, NFLX and NVDA.