Dow Hits Three-Month Low as Middle East Tensions Lift Oil Prices

Wall Street's main indexes dropped on Thursday, with the blue-chip Dow hitting a more than three-month low, as escalating tensions in the Middle East lifted oil prices and Treasury yields.

The Houthis said they attacked Saudi military sites in Jazan, days after US and Iran leaders exchanged barbs at the UN General Assembly. This development stoked inflation concerns, with the yield on the 30-year Treasury bond reaching its highest since 2004.

Crude prices shot up $4 a barrel, with Brent futures hitting $107. Technology stocks led declines on the S&P 500, with Nvidia, Broadcom, and Microsoft slipping over 1 percent each.

Analysts said faith in the AI trade helped limit losses, but investors are now more likely to bet on further interest rate increases by the Federal Reserve, with a 71 percent chance of at least a 25-basis-point hike next month.