Dow falls 600 points as oil rises and Fed rate hike bets strengthen

• Oil prices climbed for a sixth straight session with Brent crude trading around $98/barrel due to Iran-backed Houthi attacks on Saudi facilities and slowdowns in Strait of Hormuz shipping traffic, pushing the S&P 500 energy index higher
• Treasury yields surged to multi-month highs (10-year at highest since November 2023), making stocks less attractive as rate hike expectations strengthened following August's stronger-than-expected employment report
• Semiconductor stocks bucked the trend with Intel and AMD rising 9% and 6% respectively on Amazon's custom AI chip deal, while software stocks and crypto-related equities declined amid renewed competition concerns

Market Summary: Dow Drops 600 Points Amid Rising Oil and Fed Rate Concerns

Market Performance (September 8, 2026):

• Dow Jones fell 617 points (-1.16%) to 52,797.10
• S&P 500 declined 0.58% to 7,673.94
• Nasdaq Composite dropped 0.31% to 26,423.69

Key Drivers:

Rising oil prices dominated market sentiment as Middle East tensions escalated. West Texas Intermediate crude extended gains for a sixth consecutive session, while Brent crude traded near $98 per barrel. Iran-backed Houthi attacks on Saudi energy facilities and slowed shipping through the Strait of Hormuz heightened supply disruption concerns.

Higher energy costs fueled inflation worries and pushed Treasury yields to multi-month highs—the 10-year yield reached its highest since November 2023. Fed funds futures now price in a 60% probability of a 25-basis-point rate hike at the September 15-16 FOMC meeting.

Sector Performance:

Energy stocks outperformed, with the S&P 500 energy index gaining. Marathon Petroleum and Occidental Petroleum advanced on rising crude prices.

Semiconductor stocks bucked the broader decline, with the VanEck Semiconductor ETF up 1.5%. Intel surged over 9% and AMD gained 6% following Amazon's announcement to develop custom AI chips for data centers with Qualcomm. Broadcom added 3%.

Software stocks declined, with Salesforce, ServiceNow, and Intuit falling amid competition concerns from OpenAI's latest model release.

Cryptocurrency-related stocks dropped as Bitcoin retreated from $80,000, pressuring Coinbase and Strategy.

Upcoming Catalysts:

Investors await August PPI (Thursday) and CPI (Friday) data, which will shape Fed policy expectations ahead of next week's meeting. Additional headwinds include Canadian retaliatory tariffs on $20 billion of US goods, effective Tuesday.