S&P 500 Slides 0.4%, Dow Drops 1% as Oil Surge and Mideast Escalation Weigh on Markets Ahead of CPI

U.S. stocks fell on Tuesday September 8 as rising oil prices and escalating Middle East tensions pressured equities at the start of a holiday-shortened week. The S&P 500 declined 0.4 percent to close near 7,707, the Dow Jones Industrial Average dropped about 1 percent to around 53,414, and the tech-heavy Nasdaq Composite slipped to approximately 26,507, according to Trading Economics and Yahoo Finance historical data for September 4-8, 2026. The benchmark 10-year Treasury yield climbed above 4.8 percent early in the session before easing, while the VIX volatility index remained subdued at around 15.30. Losses were led by Apple down 2.55 percent, Alphabet down 2.1 percent, and Microsoft down 2.05 percent, while top gainers included Caterpillar up 1.65 percent, Honeywell up 0.95 percent, and Home Depot up 0.88 percent. The selloff followed Friday's stronger-than-expected August jobs report, which showed 162,000 nonfarm payroll additions versus expectations for just over 50,000, raising the probability of a Federal Reserve rate hike at the September 15-16 meeting. CME Group's FedWatch tool now prices a 60 percent chance of a 25-basis-point hike, up from a week ago when a hold was favored. Investors are awaiting this week's August Producer Price Index and Consumer Price Index data, the final inflation readings before the Fed meeting. Kyle Rodda, senior financial market analyst at Capital.com, said geopolitical tensions in the Middle East and uncertainty over U.S. interest rates continue to cast a shadow over the markets, especially heading into crucial price data late in the week. Gold traded around $4,407 to $4,443 per ounce Tuesday morning according to Fortune and Yahoo Finance, while Bitcoin hovered near $79,000 according to CoinStats and Rio Times.