Stocks Slide as Oil Prices and Bond Yields Rise Ahead of Federal Reserve Meeting
US stocks started September on a weak note, with all three major stock indexes falling due to concerns over higher oil prices, rising bond yields, and potential interest rate changes by the Federal Reserve later this month.
The Dow Jones Industrial Average dropped 301 points, or 0.6%, while the S&P 500 fell 0.7% and the Nasdaq Composite declined 1.1%, according to CNBC.
Investors were worried that higher borrowing costs could hurt technology companies, which often rely on borrowing money to grow. Several major tech stocks, including Nvidia, Advanced Micro Devices, and Micron Technology, each dropped about 2%. Microsoft and Google-parent Alphabet fell more than 1%.
The sell-off came as US and global bond yields moved higher. The 10-year US Treasury yield climbed to 4.788%, its highest level since January 2025, while Japan's 10-year government bond yield reached 3% for the first time since August 1996. Germany's benchmark yield also reached its highest level since 2011.
The rise in bond yields is closely linked to renewed inflation fears, with traders worried that higher oil prices could push inflation higher and make it harder for central banks to cut interest rates. Oil prices climbed again on Tuesday, with US crude prices gaining about 3% to trade above $88 a barrel, while Brent crude rose more than 2% to around $92 a barrel.
Investors are now watching the Federal Reserve closely ahead of its meeting in two weeks, assessing whether higher oil prices and inflation could affect the central bank's interest-rate decisions. September is historically a difficult month for US stocks, adding another reason for investors to remain cautious.