[NYSE] US Resumes Airstrikes on Iran... Oil and Bond Spike Sends Nasdaq Down 1%

WTI Soars 5.2%, Surpasses $90 per Barrel
10-Year U.S. Treasury Yield Exceeds 4.79%
68% Probability of Fed Rate Hike in September

As the United States resumed airstrikes against Iran, international oil prices surged and the U.S. 10-year Treasury yield soared as well, causing all three major New York stock indexes to close lower on September 1 (local time).

At the New York Stock Exchange (NYSE), the Dow Jones Industrial Average fell by 419.02 points (0.79%) to finish at 52,766.88. The large-cap-focused S&P 500 Index dropped by 54.67 points (0.71%) to 7,631.47, while the tech-heavy Nasdaq Composite slid by 271.11 points (1.03%) to end at 26,099.77.

Inside the New York Stock Exchange. New York, USA – Special Correspondent Yoonjoo Hwang

Investor sentiment on this day was significantly dampened as tensions escalated between the U.S. and Iran over the Strait of Hormuz. The United States Central Command (CENTCOM) announced that the U.S. military had begun attacks on targets belonging to Iran's Islamic Revolutionary Guard Corps (IRGC).

President Donald Trump also warned that the U.S. would "strike hard" in response to recent Iranian attacks, further heightening the military tensions between the U.S. and Iran. Concerns over crude oil supply disruptions grew particularly acute after oil tankers passing through the Strait of Hormuz were attacked by unidentified projectiles.

As a result, international oil prices soared significantly. On the New York Mercantile Exchange, West Texas Intermediate (WTI) crude for October delivery rose 5.2% from the previous session, closing at $90.22 per barrel. Brent crude for November delivery on the ICE Futures Exchange also rose 4.6% to settle at $94.65 per barrel.

The rise in oil prices reignited inflation concerns and led to sell-offs in the bond market. The yield on the 10-year U.S. Treasury surpassed 4.79% on this day, reaching its highest level since January 2025. In addition to the U.S., the yield on Japan’s 10-year government bond reached its highest since August 1996, and Germany's 10-year yield climbed to its highest point since 2011.

Recently, global government bond yields have been on the rise amid worries that higher international oil prices could put renewed upward pressure on inflation and increase the likelihood of interest rate hikes by major central banks.

The 10-year U.S. Treasury yield surpasses 4.79%. Investing.com

Notably, the market is factoring in elevated chances that the Federal Reserve will raise its benchmark rate at the upcoming Federal Open Market Committee (FOMC) meeting to be held on the 15th and 16th. According to CME FedWatch, the federal funds futures market reflected about a 68% probability of a 0.25-percentage-point rate hike in September as of this day.

However, opinions are still divided over whether a September rate hike will actually happen. Ross Mayfield, Investment Strategist at Baird, said, "The stock market always struggles to digest big and volatile moves in the bond market," adding that "such conditions can persist not only in the short term but also over the long term."

He also noted that, based on economic data released so far, the Fed does not have sufficient grounds to raise rates in September. Mayfield forecast that the Federal Reserve would likely hold rates steady in September but could raise them at least once before the end of the year.

Meanwhile, market attention is focused on the U.S. nonfarm payroll report for August, scheduled for release on the 4th. The outcome of the jobs report could significantly sway expectations for a rate hike at the September FOMC.

By sector, technology and semiconductor stocks showed pronounced weakness. Nvidia dropped 1.51%, Micron Technology fell 2.64%, Intel declined 0.60%, SK hynix ADR lost 2.31%, and Cisco Systems ended down 0.68%. Alphabet fell 1.28%, Microsoft was down 1.24%, AMD dropped 2.36%, and Tesla slid 3.22%, among other notable declines.

This content was produced with the assistance of AI translation services.