Wall Street Sinks Amid Oil Price Surge and Rate Hike Fears

Wall Street took a hit on Monday, August 31, as tensions between the US and Iran escalated, pushing oil prices higher. The Dow Jones Industrial Average fell by 350.75 points, while the S&P 500 dropped 30.49 points and the Nasdaq Composite lost 77.11 points.

The market sell-off was driven by concerns about inflation and the Federal Reserve's interest-rate path. Traders now see a nearly 60% probability of a September rate hike, up from 41.4% a week earlier, following comments from Fed Chair Kevin Warsh suggesting that policymakers may need to raise interest rates if inflation does not move closer to the central bank's 2% target.

Nvidia and Intel were among the few gainers in premarket trading, despite the broader market weakness. The strength in semiconductor stocks highlights continued investor interest in artificial intelligence and digital infrastructure, but technology stocks remain sensitive to interest-rate expectations due to higher yields putting pressure on valuations.