US Stocks Plunge as Oil Prices Soar and Fed Rate Hike Bets Rise

The US stock market declined on Tuesday as investors began September with rising oil prices, higher global bond yields, and renewed concerns over inflation.

The Dow Jones Industrial Average fell by 0.79%, while the S&P 500 and Nasdaq Composite also closed lower due to markets assessing the potential impact of renewed US-Iran hostilities on energy prices and Federal Reserve policy.

Oil prices surged after the US launched fresh strikes against Islamic Revolutionary Guard Corps targets in Iran, with US West Texas Intermediate crude gaining 5.2% to settle at $90.22 a barrel, while Brent futures rose 4.6% to close at $94.65.

The latest increase extended oil's advance after military action between the US and Iran resumed, with concerns that disruptions to energy supplies could persist, adding to inflation pressures and creating further uncertainty for financial markets.