U.S. Stocks Fall as Oil Surge, Bond Yields Rise on Fed Rate Concerns

U.S. stocks fell sharply on September 2, 2026, as a surge in oil prices driven by renewed U.S.-Iran military strikes and a global bond selloff intensified concerns that persistent inflation could force the Federal Reserve to raise interest rates later this month. The Dow Jones Industrial Average dropped 419.02 points, or 0.79%, to close at 52,766.88. The S&P 500 declined 0.71% to 7,631.47, while the Nasdaq Composite fell 1.03% to 26,099.77. The market downturn was fueled by a sharp rise in crude oil prices after the U.S. launched fresh airstrikes against Islamic Revolutionary Guard Corps targets in Iran. West Texas Intermediate crude surged $5.20 to settle at $90.22 a barrel, while Brent futures gained $4.60 to close at $94.65. The escalation, which included a report of a tanker being hit by projectiles in the Strait of Hormuz on Monday, raised fears of prolonged disruptions to global energy supplies, adding to inflationary pressures. The jump in oil prices contributed to a broader selloff in government bonds, with yields climbing to multi-year highs. The yield on the 10-year Treasury note rose to 4.80%, its highest level since January 2025.