Oil Price Surge Weighs on Wall Street as Inflation Worries Mount

U.S. stocks declined on Tuesday as oil prices continued to rise following increased fighting in the Middle East, which has constricted global oil flows.

The S&P 500 dropped 0.6%, with the Dow Jones Industrial Average falling 628 points (1.2%) and the Nasdaq composite dipping 0.3%.

Rising oil prices have exacerbated concerns about inflation, with economists expecting an acceleration to 5.4% in wholesale inflation on Thursday, up from 4.7% in July.

Friday's report on consumer price inflation is also expected to show a slight easing to 3.3%, but this remains above the Federal Reserve's target of 2%.