US Attack on Iran Sparks Wall Street Sell-Off Amid Soaring Oil Prices

Wall Street's optimism over potential peace talks between the US and Iran was short-lived as a renewed US attack on Iran sent oil prices soaring above $95 a barrel, reigniting inflation concerns and uncertainty over the Federal Reserve's next move.

The Dow Jones Industrial Average closed 0.79% lower at 52,766.88 points, while the S&P 500 declined 0.71% to 7,631.47. The Nasdaq Composite fared worse, losing 1.03% to end at 26,099.77.

Brent crude rose 5.23% following the attacks, a stark contrast to earlier optimism that had eased concern about energy supplies. This sudden shift in market expectations has investors now looking toward the Federal Reserve's meeting on September 15 and 16, where policymakers may need to raise interest rates if inflation fails to decline quickly.