Oil Price Surge Drives Dow 617 Points Lower, Rate Hike Expectations Strengthen

The Dow Jones Industrial Average dropped 617 points on Tuesday to 52,797.10, as renewed tensions in the Middle East pushed oil prices higher.

Oil prices have climbed for a sixth consecutive session due to concerns about disruptions to global energy supplies following attacks by Iran-backed Houthis in Yemen on Saudi energy facilities and cities.

The increase in oil prices has become an important concern for investors because it could add to inflationary pressures, making stocks relatively less attractive compared with risk-free government securities.

Fed funds futures were pricing in about a 60% probability of a 25-basis-point rate hike at the Federal Reserve's September 15-16 meeting.