Stocks closed broadly lower on Tuesday, September 1, 2026, as renewed U.S. military strikes on Iran pushed oil prices higher, intensifying worries about persistent inflation. A deepening sell-off in the bond market further pressured stocks. The Standard & Poor’s 500 index declined by 0.7%, the Dow Jones Industrial Average dropped 0.8%, and the Nasdaq Composite slid 1%. These major indexes have now experienced losses for three consecutive days.
This weak start to September contrasts with a mostly positive August for Wall Street, where every major index recorded monthly gains. However, underlying concerns continued to weigh on the market, including anxiety over rising prices, government debt, and the broader impact of global conflicts on both the U.S. and the global economy. Technology stocks, such as Nvidia (down 1.5%) and Amazon (down 1.9%), were among the biggest drags on the market.
Escalating tensions in the Middle East led to a 5.7% rise in the front-month West Texas Intermediate crude oil futures contract, reaching $90.64 per barrel, following attacks on two tankers and U.S. strikes against Iran. This "energy shock" contributed to higher interest rates, with the 2-year Treasury yield hitting a 52-week intraday high of 4.400% and closing at 4.398%. The 10-year Treasury yield also increased by 3.4 basis points to 4.792%, and the 30-year Treasury yield rose by 1.7 basis points to 5.266%. The probability of a 25-basis-point rate hike at the September 15-16 Federal Open Market Committee (FOMC) meeting increased to 68.2%, up from 39.6% a week prior.
In response to the market volatility, investors rotated into traditional "risk-off" sectors. Energy stocks, including Chevron (up 2.4%), consumer staples like Procter & Gamble (up 0.8%), and healthcare names such as UnitedHealth Group (up 1.8%), saw gains. Utility stocks also performed well. Apple was a notable gainer among Dow Jones stocks, rising 2.6% on its first trading day under new leadership. Conversely, Palo Alto Networks (PANW) gave back some of its recent gains, falling 5.2% ahead of its earnings report, despite a "Buy" rating and a $415 price target from Stifel.
Novartis (NVS) saw a significant 6.0% boost after announcing positive Phase III trial results for its multiple sclerosis drug, remibrutinib. The drug demonstrated superiority over an existing treatment in reducing relapse rates and inflammatory brain lesions with a favorable safety profile, potentially making it a blockbuster drug. Despite this, analyst consensus for Novartis remains a "Hold" according to S&P Global Market Intelligence.
