Stocks Fall as Middle East Jitters Spur Oil Rally: Markets Wrap
(Bloomberg) — A renewed rally in oil prices sent stocks lower, stoking concerns about higher interest rates just days ahead of key inflation data.
Brent crude settled around $98 a barrel, and kept climbing after reports of strikes on Middle East energy infrastructure. The S&P 500 retreated for a second straight session. The Dow Jones Industrial Average lost 1.2%. Short-term Treasury yields advanced. Money markets priced in an over 50% chance of a Federal Reserve rate increase this month.
The US has struck targets near Kharg Island and the port city of Jask, Fox News reported. Separately, Iran’s state TV said tanker crews in the vicinity of Kuwaiti and Bahraini piers should “immediately abandon their vessels, whether at anchor or docked, as they will be targeted.”
Saudi Arabia halted several energy facilities in the south, as the Iran-backed Houthi militants claimed fresh strikes on the kingdom.
“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.
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.
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.
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.
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 0.6% as of 4 p.m. New York time The Nasdaq 100 fell 0.1% The Dow Jones Industrial Average fell 1.2% The MSCI World Index fell 0.6% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1624 The British pound was little changed at $1.3539 The Japanese yen rose 0.2% to 153.98 per dollar Cryptocurrencies
Bitcoin fell 0.8% to $78,558.48 Ether fell 0.3% to $2,488.2 Bonds
The yield on 10-year Treasuries was little changed at 4.79% 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 2.8% to $94.08 a barrel Spot gold fell 1% to $4,360.27 an ounce ©2026 Bloomberg L.P.
