US Stocks Slide as Iran Conflict Sparks Oil Price Surge

Stocks took a hit on Tuesday as ongoing military strikes between the US and Iran continued to fan the flames of global uncertainty. Oil prices surged, rising 4.6% for Brent crude and 5.2% for U.S. oil, with both benchmarks breaking above $90 per barrel.

The S&P 500 index fell 0.7%, while the Dow Jones Industrial Average dropped 0.8% and the Nasdaq composite slid 1%. The major indexes have now lost ground three days in a row, following a weak start to September that has seen them shed value after a shaky but mostly positive month for Wall Street.

The ongoing sell-off in US government bonds is also putting pressure on stocks. The yield on the 10-year Treasury rose to 4.79%, up from 4.75% late Monday, while the yield on the 2-year Treasury climbed to 4.39%, significantly higher than its start-of-2026 level of around 3.50%. Rising bond yields signal that investors are demanding a higher return from Treasurys due to growing government debt.

The US debt surpassed $40 trillion two weeks ago, with defense costs and interest on the burgeoning deficit making up an enormous share of federal spending. Higher yields on bonds will lead to increased borrowing costs for mortgages and other loans, weighing down investments and making it harder for businesses to expand.