Dow Falls 405 Points as Brent Tops $100, 10-Year Yield Nears 4.86%

U.S. stocks fell for a third straight session as the Dow Jones Industrial Average declined 405.41 points to 52,380.66. The S&P 500 slipped 0.48% to 7,636.36 and the Nasdaq Composite fell 0.64% to 26,253.34.

Brent crude settled at $101.21 a barrel, up 3.36%, while West Texas Intermediate finished at $96.05, up 3.25%. Both benchmarks recorded their highest settlements since May after reports of renewed hostilities in the Middle East, including missile launches and vessel attacks that raised concerns about potential disruptions to regional energy supplies.

The benchmark 10-year U.S. Treasury yield rose to 4.857% after the Treasury Department announced a buyback of up to $6 billion of longer-dated government debt, roughly three times the size of its typical operation. Some market participants had anticipated a larger buyback. Higher yields increase returns on low-risk assets and can reduce demand for equities.

Traders are awaiting U.S. inflation data due later in the week, with the Producer Price Index scheduled for Thursday and the Consumer Price Index for Friday. Markets are pricing in roughly a 60% chance that the Federal Reserve will raise interest rates at its Sept. 15-16 meeting.

Energy was the only S&P 500 sector to gain as crude rallied. The index remains about 2% below its Aug. 13 record close but roughly 12% higher year to date. The Philadelphia Semiconductor Index ticked higher, with Advanced Micro Devices among the advancers. Shares of Dow Inc. moved lower after the company was reported to be considering exiting a $20 billion partnership with Saudi Aramco.

Meta Platforms shares rose after the company introduced an AI assistant able to perform tasks such as sending emails and booking travel. Alphabet shares declined following an announcement that the Google parent will invest at least $15.1 billion in AI infrastructure in Finland over two years, including a significant nuclear power supply agreement.

Apple held its annual product launch, introducing iPhone 18 Pro models and a foldable iPhone Duo that starts at $1,999. The Pro models carry a $100 price increase from their predecessors. The company also unveiled AirPods 5 and the Apple Watch Series 12.

Bitcoin traded below $80,000, around $78,360, as investors weighed rising oil prices and shifts in currency markets. The Japanese yen strengthened against the dollar to levels last seen in February. Charu Chanana, chief investment strategist at Saxo, warned the yen’s strength could contribute to an unwinding of the carry trade. U.S. Treasury Secretary Scott Bessent has indicated further intervention in currency markets could be possible.

In the technology sector, Anthropic researcher Jacob Coxon resigned, citing concerns that frontier AI labs are moving toward more self-improving systems under competitive pressure. Anthropic’s alignment lead, Evan Hubinger, estimated there is a greater than 10% chance that highly advanced AI could cause catastrophic outcomes within the next decade and noted his figure is a personal estimate rather than an organizational forecast.

Investors will monitor the upcoming inflation reports and the Federal Reserve meeting for signals on interest rates. Markets are expected to remain sensitive to developments in energy markets, Treasury yields and geopolitical tensions in the near term.