Nasdaq Slides as Inflation Concerns Mount Amid Fed Rate Hike Expectations

Nasdaq investors are navigating a cautious start to September as they track key market drivers, including the Federal Reserve's interest-rate outlook and rising Treasury yields.

The Fed's next policy moves remain one of the biggest market catalysts, with traders increasing expectations for a possible rate hike after recent comments from Fed Chair Kevin Warsh. Higher interest rates can put pressure on valuations for Nasdaq-listed growth and technology companies because future earnings become less attractive when discount rates rise.

Rising crude prices are another major factor for Wall Street, as renewed Middle East tensions pushed oil prices higher, with Brent crude moving above $90 a barrel. This increase has raised concerns that higher energy costs could make it more difficult for inflation to moderate.