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Wall Street Slides as Surging Oil Prices Stoke Inflation Fears
(MENAFN) US stocks retreated Tuesday as climbing oil prices reignited investor anxiety over inflation and the trajectory of Federal Reserve interest rate policy.
The Dow Jones Industrial Average shed 628.18 points, or 1.18%, closing at 52,786.07 in its second straight session of losses. The S&P 500 slipped 0.58% to 7,673.52, while the Nasdaq Composite dipped 0.32% to settle at 26,421.41. Trading had been paused Monday for the Labor Day holiday.
Crude prices kept climbing as tensions in the Middle East intensified. US benchmark West Texas Intermediate rose 2.8% to $94 a barrel, extending its winning streak to six consecutive sessions, while international benchmark Brent crude hovered near $99.
The jump in energy costs deepened worries that inflationary pressure could prove more stubborn than expected, with investors now bracing for a pair of closely watched inflation reports due later this week. The producer price index for August is set for release Thursday, followed by the consumer price index on Friday — both seen as pivotal in shaping expectations ahead of the Fed's Sept. 15-16 policy meeting. Money markets were pricing in a 60% probability that the central bank would raise its benchmark rate by 25 basis points at that gathering.
Treasury yields climbed in tandem, with the benchmark 10-year note rising to 4.796%.
Semiconductor names offered a rare bright spot amid the broader selloff. Intel surged more than 9%, Advanced Micro Devices advanced 5.9%, and Broadcom rose roughly 3%.
Adding further pressure, renewed trade friction between the US and Canada dented sentiment after Canadian retaliatory tariffs on roughly $20 billion worth of American goods took effect Tuesday.
European Markets End Session Mixed
European equities closed Tuesday in mixed territory as rising oil prices and mounting Middle East tensions kept traders on edge.
The pan-European STOXX Europe 600 index slipped 0.05% to 649.60 points. Britain's FTSE 100 fell 0.1% to 10,811.66, while Germany's DAX was virtually flat at 26,007.63. France's CAC 40, by contrast, edged up 0.14% to close at 8,317.98.
Switzerland's SMI index tumbled 1.55%, dragged down by a nearly 11% plunge in shares of pharmaceutical giant Novartis after another setback in its drug development pipeline.
Energy stocks gained ground on the back of higher crude prices, while investors turned their attention to the European Central Bank's upcoming monetary policy decision later in the week.
The Dow Jones Industrial Average shed 628.18 points, or 1.18%, closing at 52,786.07 in its second straight session of losses. The S&P 500 slipped 0.58% to 7,673.52, while the Nasdaq Composite dipped 0.32% to settle at 26,421.41. Trading had been paused Monday for the Labor Day holiday.
Crude prices kept climbing as tensions in the Middle East intensified. US benchmark West Texas Intermediate rose 2.8% to $94 a barrel, extending its winning streak to six consecutive sessions, while international benchmark Brent crude hovered near $99.
The jump in energy costs deepened worries that inflationary pressure could prove more stubborn than expected, with investors now bracing for a pair of closely watched inflation reports due later this week. The producer price index for August is set for release Thursday, followed by the consumer price index on Friday — both seen as pivotal in shaping expectations ahead of the Fed's Sept. 15-16 policy meeting. Money markets were pricing in a 60% probability that the central bank would raise its benchmark rate by 25 basis points at that gathering.
Treasury yields climbed in tandem, with the benchmark 10-year note rising to 4.796%.
Semiconductor names offered a rare bright spot amid the broader selloff. Intel surged more than 9%, Advanced Micro Devices advanced 5.9%, and Broadcom rose roughly 3%.
Adding further pressure, renewed trade friction between the US and Canada dented sentiment after Canadian retaliatory tariffs on roughly $20 billion worth of American goods took effect Tuesday.
European Markets End Session Mixed
European equities closed Tuesday in mixed territory as rising oil prices and mounting Middle East tensions kept traders on edge.
The pan-European STOXX Europe 600 index slipped 0.05% to 649.60 points. Britain's FTSE 100 fell 0.1% to 10,811.66, while Germany's DAX was virtually flat at 26,007.63. France's CAC 40, by contrast, edged up 0.14% to close at 8,317.98.
Switzerland's SMI index tumbled 1.55%, dragged down by a nearly 11% plunge in shares of pharmaceutical giant Novartis after another setback in its drug development pipeline.
Energy stocks gained ground on the back of higher crude prices, while investors turned their attention to the European Central Bank's upcoming monetary policy decision later in the week.
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