Oil Price Surge Sends Stocks Lower Amid Inflation Fears
On August 31, U.S. stocks closed lower as oil prices surged, reigniting inflation fears and increasing the likelihood of tighter monetary policy.
The jump in crude prices dampened investor risk appetite, causing benchmark U.S. Treasury yields to rise. Investors were processing Federal Reserve Chair Kevin Warsh's hawkish tone from his speech at the Jackson Hole Symposium on Friday.
The Dow Jones Industrial Average fell 380.22 points, or 0.71%, to 53,179.77, while the S&P 500 lost 27.39 points, or 0.36%, to end at 7,684.37 points. The Nasdaq Composite dropped 41.51 points, or 0.16%, to 26,360.91.
Peter Tuz of Chase Investment Counsel noted that the odds now favor a rate hike in September, following Warsh's comments and ongoing hostilities in the Middle East.