Dow Falls 617 Points as Oil Rises, Fed Hike Odds Increase

The Dow Jones Industrial Average fell 617 points to 52,797.10 on Tuesday as oil prices climbed and traders increased the odds of a Federal Reserve interest-rate hike ahead of key August inflation reports. The S&P 500 slipped 0.58% to 7,673.94 and the Nasdaq Composite declined 0.31% to 26,423.69. Markets reopened after the Labor Day holiday.

Oil rose after attacks by Iran-backed Houthi forces in Yemen targeted Saudi energy facilities and nearby cities and shipping through the Strait of Hormuz slowed. West Texas Intermediate futures rose for a sixth straight session and Brent crude traded near $98 a barrel.

Higher oil prices helped push Treasury yields higher. The benchmark 10-year Treasury yield reached its highest level since November 2023, and the two-year yield climbed to its strongest level since January 2025. Fed funds futures priced about a 60% probability of a 25-basis-point increase at the Fed’s Sept. 15-16 meeting following a stronger-than-expected August jobs report showing payroll gains above economists’ forecasts.

Investors await the producer price index on Thursday and the consumer price index on Friday for additional inflation data ahead of the Fed meeting.

Energy stocks gained, with Marathon Petroleum and Occidental Petroleum among the advancers. Semiconductor shares outperformed: the VanEck Semiconductor ETF rose about 1.5%, Intel gained roughly 9%, Advanced Micro Devices climbed about 6% and Broadcom added around 3%. Intel and Qualcomm saw strength after Qualcomm announced a deal with Amazon to develop custom artificial intelligence chips for data centers.

Software names fell, including Salesforce, ServiceNow and Intuit. Apple shares slipped ahead of an event expected to feature the company’s latest smartphone.

Cryptocurrency-linked stocks moved lower after Bitcoin pulled back from the $80,000 level; Coinbase declined. Canadian retaliatory tariffs on roughly $20 billion of U.S. goods took effect Tuesday.

Major indexes finished lower for the session.