Traders worked the floor of the New York Stock Exchange on Aug. 25, 2026, as U.S. equities slid Thursday after domestic oil prices surged past $100 a barrel. The selloff reflected mounting anxiety that a prolonged conflict in the Middle East would fuel higher inflation and keep interest rates elevated for longer.
Major Indexes Finish Lower
The Dow Jones Industrial Average fell 195 points, or 0.4%. The S&P 500 declined 0.6%, while the Nasdaq Composite dropped 0.9%. The three major averages extended a losing streak to three sessions.
Oil Prices Jump on Geopolitical Tensions
Crude prices continued to weigh on market sentiment as the war between the U.S. and Iran entered its seventh month. U.S. West Texas Intermediate futures for October delivery climbed above $100 per barrel, while the international benchmark Brent crude for November spiked above $105 a barrel.
Treasury Yields Hit Multi-Month Highs
The rally in energy pushed the benchmark 10-year Treasury yield above 4.9%, its highest level since November 2023. Rising yields pressured rate-sensitive growth sectors, particularly high-beta semiconductor stocks that have led the bull market.
Chip Stocks Lead Sector Declines
Intel shares fell 3%, and Micron Technology declined 2%, as investors worried that higher borrowing costs and energy expenses could slow economic growth and dampen demand for semiconductors.
Wholesale Inflation Data Fails to Soothe Nerves
A relatively tame producer price index report did little to calm fears. The PPI rose a seasonally adjusted 0.4% in August, matching the Dow Jones consensus. On an annual basis, wholesale inflation stood at 5.4%, well above the Federal Reserve’s 2% target.
The data arrives ahead of Friday’s closely watched consumer price index. Both gauges feed into the Fed’s preferred inflation metric, the personal consumption expenditures price index, which will not be released until after the central bank’s rate decision on Sept. 16.
Analyst Perspective: PPI Inconclusive, Oil and Yields Raise Stakes
“The PPI release itself was inconclusive, in that doesn’t really help to settle the question of ‘hike or no hike’ from the Fed next week, but WTI oil prices surging back above $100 and Treasury yields hitting new highs is certainly raising the stakes for investors ahead of tomorrow’s crucial CPI report,” wrote Stephen Coltman, head of macro at 21shares.
Fed Hike Probability Climbs to 74%
Fed funds futures were last pricing in a 74% likelihood of a quarter-point rate increase following next week’s policy meeting, according to the CME FedWatch Tool.
Treasury Buyback Announcement Adds to Pressure
The market’s three-day slide accelerated after the Treasury Department said it would buy back up to $6 billion in longer-term debt — triple the usual amount. Less than a month earlier, the Treasury had announced it would more than double the size of its $2 billion government debt repurchase operations.
— CNBC’s Jeff Cox and Spencer Kimball contributed to this report.
