Stocks, Bonds Fall as Oil Jumps on Mideast Jitters: Markets Wrap
(Bloomberg) — A rally in oil prices sent stocks and bonds lower, fueling concerns about higher interest rates just days ahead of key inflation data.
Brent crude settled around $98, and kept climbing on a report that several explosions were heard from the anchorage area of Iran’s Kharg Island. The S&P 500 fell for a second straight session. The Dow Jones Industrial Average lost about 1%. Treasury yields advanced. Money markets priced in an over 50% chance of a Federal Reserve rate increase this month.
The case for a hike when the Fed meets Sept. 15-16 may hinge on inflation data after the latest jobs report showed broad-based strength in the labor market.
“With geopolitical tensions and oil prices on the rise, the markets may find it difficult to focus on much beyond the inflation discussion,” said Chris Larkin at E*Trade from Morgan Stanley.
Economists project the consumer price index rose 0.4% in August, an acceleration from a month earlier, due in part to higher gasoline costs. Stripping out the volatile energy and food components, the core CPI is projected to have risen by a more moderate 0.2%, according the Bloomberg survey median ahead of Friday’s report.
That would help bring the annual gauge of underlying inflation down to 2.4%, the smallest year-over-year increase since 2021.
“Energy prices can’t keep rising without impacting the market, and at some point even a tame inflation report later this week may not mean much if crude oil prices remain in the mid-90s, approaching triple digits,” according to Bespoke Investment Group strategists.
On Thursday, the Bureau of Labor Statistics releases the producer price index. Economists expect both the PPI and a core measure to accelerate in August. Those figures are expected to show more of the immediate price impacts from the Iran war and related supply-chain disruptions.
“Brace for a turbulent week, with inflation data set to swing market expectations for a Fed hold or hike next week,” said Krishna Guha at Evercore.
Meantime, Treasury Secretary Scott Bessent noted his move last month to expand a buyback program for older US government securities was aimed at quelling a “fever” in the bond market.
“My job is to try to push things back towards equilibrium,” Bessent said in answering questions at a Breitbart News event Tuesday in Washington. “I don’t believe that I can change the equilibrium price. But nothing’s ever in equilibrium.”
Corporate Highlights:
Meta Platforms Inc. unveiled a new artificial-intelligence agent designed to carry out tasks on a user’s behalf, advancing Mark Zuckerberg’s vision of a future where people each have a personalized AI assistant. Qualcomm Inc. signed up Amazon.com Inc. as a data center chip customer and investor, scoring a major win in its bid to benefit from soaring AI spending. Intel Corp. climbed after a report from DigiTimes that the company is expected to raise prices. Separately, Northland Securities upgraded the chipmaker to outperform, citing turnaround progress. ASML Holding NV has won commitments from top chipmakers to use its latest semiconductor production gear, while embarking on a broader agreement to meet surging demand for more powerful AI technology. Boston Scientific Corp. and Stryker Corp. fell after the medical device companies said they are dealing with the repercussions of separate cyber attacks that curtailed their ability to get products to customers and dented sales, with damage that could last for months. Some of the main moves in markets:
Stocks
The S&P 500 fell 0.4% as of 3:15 p.m. New York time The Nasdaq 100 was little changed The Dow Jones Industrial Average fell 1.1% The MSCI World Index fell 0.5% Currencies
The Bloomberg Dollar Spot Index fell 0.1% The euro was little changed at $1.1627 The British pound was little changed at $1.3544 The Japanese yen rose 0.3% to 153.86 per dollar Cryptocurrencies
Bitcoin fell 0.9% to $78,488.48 Ether fell 0.3% to $2,487.47 Bonds
The yield on 10-year Treasuries advanced two basis points to 4.80% Germany’s 10-year yield declined two basis points to 3.37% Britain’s 10-year yield was little changed at 5.17% Commodities
West Texas Intermediate crude rose 2.2% to $93.50 a barrel Spot gold fell 0.7% to $4,371.31 an ounce ©2026 Bloomberg L.P.
