Oil Prices Drop, Calming Inflation Worries and Boosting Stocks

Oil prices fell for the second day in a row on Tuesday, which helped ease concerns about inflation and boost stock markets. The S&P 500 rose 0.3%, while the Dow Jones Industrial Average added 160 points.

The drop in oil prices came despite heightened tensions between the United States and Iran, with new sanctions announced by the Trump administration to further hurt Iran's economy. However, a delegation from Pakistan reported 'very positive and productive' talks with Iranian President Masoud Pezeshkian on reopening the Strait of Hormuz and reviving negotiations.

The decline in oil prices helped calm worries about high inflation, which had driven Treasury yields higher through the summer. The yield on the 10-year Treasury fell to 4.63% from 4.70% late Monday and from 4.74% at the end of last week.