Stocks Drop Across the Board as Oil Surges

Stocks fell on Wall Street on Wednesday as the price of crude oil topped $100 a barrel again.

• The S&P 500 fell 37.16 points, or 0.5%, to 7,636.36.
• The Dow Jones Industrial Average fell 405.41 points, or 0.8%, to 52,380.66.
• The Nasdaq composite fell 168.07 points, or 0.6%, to 26,253.34.

The price of Brent crude jumped 3.4%, going back above $100 a barrel for the first time since July, the AP reports. The surge in oil prices follows the latest attacks between the US and Iran. The Iran war is likely going to keep oil prices elevated through the US midterm elections, President Trump said Wednesday, though he predicted that they would be "tumbling downward" after the November vote.

The losses were broad, with retailers among the companies leading the market lower. Amazon fell 1.8%, and Starbucks fell 1.9%. Nearly every sector within the benchmark S&P 500 lost ground, but oil companies pushed higher. Exxon Mobil rose 2.2% and Chevron rose 1.9%. Shares of Meta Platforms rose 6.6% as the parent company of Instagram and Facebook launched a personal artificial intelligence agent, Muse, for people 18 and over who are looking for help with day-to-day tasks like schedules and shopping

• The jump in oil prices over the course of the war has fueled already high inflation. Gasoline prices in the US are up about 32% from a year ago to $4.22 per gallon. Higher fuel prices cut into household budgets directly when it comes to the cost of driving, but they also indirectly raise prices for goods because of higher shipping costs.
• Wall Street will get more updates this week on inflation, starting with a look at prices at the wholesale level on Thursday with the release of the Producer Price Index for August. It measures prices businesses pay for goods before they reach customers. That report will be followed up Friday with the release of the Consumer Price Index, or CPI, for August, which shows the more direct price impact for households.

• The latest reports are expected to show that the rate of inflation remains above 3%. That has been an issue for the Federal Reserve, which is aiming to hold inflation at a target rate of 2%. The central bank has been holding rates steady, but Wall Street is leaning toward a 62% chance that it will raise its benchmark interest rate at its meeting next week, according to data from CME Group.
• Rising Treasury yields in the bond market were also weighing down stocks on Wall Street Wednesday. The US Treasury Department on Wednesday said it would buy back up to $6 billion in long-term debt. That follows an announcement in August previewing plans for an unusually large buyback in an effort to contain rising yields, which make it more expensive for US companies to borrow money and also weigh down other investments, such as stocks.
• Bond yields had been holding steady prior to the announcement, but gained ground shortly after. "The simplest version here is that market interventions have a long history of not working very well," said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott.