Wall Street Slips as Oil Prices Soar and Inflation Concerns Persist

U.S. stocks stumbled back into trading after the three-day weekend, weighed down by rising oil prices and concerns about inflation.

The S&P 500 dropped 0.4%, while the Dow Jones Industrial Average fell 520 points, or 1%, to $51,620 as of 10 a.m. Eastern time.

Oil prices continued their upward trend, with Brent crude rising 1% to $97.95 after briefly touching $99.46. The surge in oil prices has been driven by increased fighting in the Middle East and reduced hopes for a deal to reopen the Strait of Hormuz to oil tankers.

The higher cost of oil is exacerbating worries about inflation, which remains above the Federal Reserve's 2% target. This week's inflation reports will provide more insight into the economic picture, with wholesale prices expected to accelerate to 5.4% in August and consumer prices potentially easing to 3.3%.

The Fed's decision on interest rates next week is a key factor in traders' minds, with a 58% probability of a rate hike according to CME Group data. However, some experts have suggested that the Fed may not raise rates despite high inflation due to the potential economic impact.