Oil Price Surge Triggers Market Sell-Off and Higher Interest Rate Expectations

Wall Street stocks took a hit on Tuesday as oil prices continued to climb, sparking concerns about stubbornly high inflation. The S&P 500 index fell 0.4%, while the Dow Jones Industrial Average dropped 164 points or 0.3%. Technology stocks were among the heaviest weights on the market, with Nvidia down 1.2% and Advanced Micro Devices slipping by 2.9%. The sell-off in U.S. government bonds was a major contributor to the market's decline, with yields on 10-year Treasurys rising to 4.77%.

The ongoing conflict between the U.S. and Iran has pushed up energy costs, fueling inflation that is already above 3%. The Federal Reserve is expected to raise interest rates before the year is over in an effort to ease price increases. Investors are betting on a 66% chance of a rate hike at the central bank's September meeting.

Markets in Europe also fell, while those in Asia were mixed. The jobs market will be closely watched ahead of the Fed's meeting, with the government reporting that U.S. job openings rose slightly in July. A broader monthly report for August is due out on Friday.