Oil Price Surge Sparks US Stock Sell-Off Amid Iran Deal Uncertainty
US stocks fell on Monday as higher oil prices and Treasury yields weighed on investor sentiment. The Dow Jones Industrial Average declined by 347.11 points, or 0.67%, to 51,481.51, while the S&P 500 lost 59.72 points, or 0.77%, to 7,683.69.
The decline was attributed to rising oil prices and Treasury yields, which have been influenced by concerns over an Iran war peace deal. US President Donald Trump rejected a proposed deal from Iran, but Qatari mediators are expected to hold talks with the two countries to find a possible agreement.
Jack Ablin, chief investment strategist at Cresset Capital Management, said 'Iran is driving oil prices, and oil prices are driving inflation, and inflation is driving interest rates.' He noted that interest rates are looking attractive relative to equities, which could be a shift from the past 20 years.
Markets are pricing in a 70.3% chance of an interest rate hike at the Federal Reserve's October meeting. Several key economic releases this week will help shape the path of Fed policy, including readings on inflation and the labor market.