Stocks Plunge as Oil Surges Past $100 and Treasury Yields Soar

US stocks declined for a third consecutive day on Wednesday as oil prices surged and Treasury yields hit their highest levels in almost three years. The Dow Jones Industrial Average dropped 405.41 points, or 0.77%, to 52,380.66. The S&P 500 fell 0.48% to 7,636.36, while the Nasdaq Composite declined 0.64% to 26,253.34.

The rise in Treasury yields came despite the US Treasury Department's decision to buy back up to $6 billion of longer-dated government debt. The benchmark 10-year Treasury yield climbed to 4.857%, its highest level since November 2023. This increase in yields can make equities less attractive by offering a higher return on relatively low-risk assets.

The market is also awaiting key inflation data, with the Producer Price Index due Thursday and the Consumer Price Index on Friday. Traders are pricing in a roughly 60% chance that the Federal Reserve will raise interest rates at its meeting next week. Oil prices added to the pressure on stocks as concerns over disruptions to Middle East energy supplies intensified amid rising tensions between the US and Iran.

Brent crude futures settled 3.36% higher at $101.21 a barrel, while West Texas Intermediate futures gained 3.25% to $96.05. The S&P 500 energy sector was the only sector index to rise on Wednesday, while other sector indexes declined.