Oil Prices Surge, U.S. Stocks Tumble Amid Iran Conflict

U.S. stocks declined on Tuesday as investors returned from a three-day weekend following the latest fighting in the war with Iran, which has pushed oil prices higher.

The S&P 500 fell 0.4%, while the Dow Jones Industrial Average dropped 520 points (1%) and the Nasdaq composite was 0.3% lower as of 10 a.m. Eastern time.

Oil prices continued to rise, with Brent crude reaching $97.95 per barrel, up 1%, after briefly climbing to $99.46. This increase comes despite hopes for a deal to reopen the Strait of Hormuz and restore oil tanker traffic.

The higher oil prices are exacerbating inflation concerns in the U.S., which could influence the Federal Reserve's decision on interest rates. The Fed meets next week, with traders predicting a 58% probability that it will raise its federal funds rate after the meeting.