US Stocks Plummet as Iran Tensions Escalate
US stocks plummeted on Monday as tensions between the US and Iran returned to the markets. The Dow Jones Industrial Average dropped 346 points, or 0.7%, while the S&P 500 fell 0.5% and the Nasdaq Composite also declined by 0.5%. This decline comes after a US strike on Iran's Larak Island on Sunday, which marked the first publicly acknowledged US attack on Iranian positions since late July.
The renewed fighting pushed oil prices higher, with US West Texas Intermediate crude rising more than 3% to above $86 a barrel and global benchmark Brent crude also gaining over 3% to above $91 a barrel. Despite Monday's fall, the US stock market is still on track to finish August with strong gains.
Technology stocks were a key driver of August's gains, with artificial intelligence-linked companies performing strongly during the month and helping lift the broader market. The S&P 500 technology sector was up nearly 6% for August, with Nvidia gaining more than 7%, Microsoft rising 9%, and Micron Technology jumping 14%.
However, inflation and interest-rate concerns remain a concern, with Treasury yields climbing to multi-year highs as investors worry about sustained high inflation. The US Treasury has attempted to calm the bond market by saying it will increase debt repurchases, but longer-term Treasury yields remain elevated.