Dow drops more than 500 points to start shortened week as oil prices climb: Live updates
Stocks dropped Tuesday to kick off a shortened week of trading, with investors monitoring escalating tensions in the Middle East ahead of a key inflation reading later this week.
The Dow Jones Industrial Average tumbled 574 points, or 1.1%. The S&P 500 was down by 0.4%, while the Nasdaq Composite slid 0.3%. U.S. markets were closed Monday for the Labor Day holiday.
Stocks came under pressure as oil prices continued to rise. West Texas Intermediate futures climbed for a sixth straight day — its longest rally since a seven-day streak back in March — as the U.S. and Iran exchanged blows over the weekend. Brent crude oil futures last hovered around $98 per barrel.
The spike in energy prices sharpens investors' focus on inflation data set to release later this week, as they will likely shape expectations for monetary policy ahead of the Federal Reserve's meeting next week. The producer price index and consumer price index for August are due out Thursday and Friday, respectively.
Fed funds futures were last pricing in a 58% chance the central bank will hike rates by a quarter-percentage point after the Sept. 15-16 meeting, according to the CME Group's FedWatch tool.
"If you have a CPI reading that surprises to the upside, that's going to really make it difficult for [the Federal Reserve] not to hike rates," said Mark Hackett, chief market strategist at Nationwide. "And that is effectively what investors are focused on right now."
The spike in energy prices also put upward pressure on Treasury yields. The benchmark 10-year Treasury note yield last week climbed to its highest level since November 2023, while the shorter-term 2-year note yield scaled to a January 2025 high.
Traders also have to contend with renewed trade tensions between the U.S. and Canada. Retaliatory tariffs from Canada on about $20 billion of U.S. goods take effect on Tuesday. President Donald Trump on Monday said ahead of the new duties that Canadian aircraft manufacturer Bombardier can't sell in the U.S. unless Canada begins making its products in the U.S.
Northland Capital Markets' Gus Richard upgraded Intel to outperform from market perform on Tuesday.
A shortage of server CPUs, along with Intel's partnership with SpaceX and Tesla to build a semiconductor manufacturing complex in Texas called Terafab, will support Intel's growth, Richard said.
"We also believe that Intel's Terafab partnership will materially benefit INTC's foundry business and drive the needed scale of its process technology footprint," Richard wrote on the Tuesday note to clients.
He also gave a $120 price target for the company, implying a 25.3% upside from Friday's close. Shares for Intel were up more than 7% following the upgrade.
— Ananya Chetia
Global energy stocks climbed to a record high Tuesday morning. The iShares Global Energy ETF (IXC), which tracks the sector worldwide, rose to its highest level going back to its November 2001 inception. It was last up by 1.8%.
Other ETFs reached multi-year highs. The State Street SPDR S&P Oil & Gas Exploration & Production ETF (XOP), which focuses exclusively on U.S. companies, hit its highest point going back to June 2015. The ETF was last higher by 2.3%.
Petrobras was a notable advancer, gaining more than 4%. Shares of Petrochina and APA Corp were last up by more than 3%, each.
— Sarah Min, Gina Francolla
The Dow Jones Industrial Average opened lower Tuesday morning.
The Dow shed 511 points, or 0.7%. The S&P 500 was down by 0.2%, while the Nasdaq Composite dipped 0.1%. U.S. markets were closed Monday for the Labor Day holiday.
— Sarah Min
Qualcomm is partnering up with Amazon Web Services to "help build out AWS" AI Infrastructure, according to the company's press release.
"As AI workloads grow exponentially — driving unprecedented demand for compute, storage, networking and memory bandwidth, and energy-efficient infrastructure — the collaboration brings together Amazon's comprehensive, secure, and price-performant AI infrastructure with Qualcomm Technologies' leadership in power-efficient processing, silicon design and system-level integration," the statement said.
Shares for the chipmaker rose over 7% following the news.
— Ananya Chetia
Nasdaq-100 futures outperformed, gaining 0.2% in the premarket as chip stocks rose. The iShares Semiconductor ETF (SOXX) was last higher by 1.7%. Nvidia was up by 0.7%, while shares of Broadcom advanced 1.1%. Intel jumped 4.7%.
Futures tied to the S&P 500 and Dow Jones Industrial Average, on the other hand, were lower.
— Sarah Min
Bloom Energy shares are up more than 6% as the fuel-cell manufacturer is poised to join the S&P 500 on Sept. 21.
Bloom has been a major beneficiary of the AI data center buildout. Its stock is up about 190% this year.
— Spencer Kimball
Check out the companies making the biggest moves premarket:
Roivant Sciences — Shares rallied 24% after the pharma company said Phase 2 trial results for subsidiary Pulmovant's mosliciguat demonstrated "a clinically meaningful and statistically significant placebo-adjusted reduction in pulmonary vascular resistance" in patients with pulmonary hypertension with interstitial lung disease.
Lockheed Martin — The defense contractor ticked 0.7% higher after UBS upgraded the stock to buy from neutral, citing underappreciated earnings growth potential.
Novartis — The drugmaker tumbled 12% after Phase 3 results showed its del-desiran drug led to no "significant improvement" in patients with myotonic dystrophy type 1.
— Fred Imbert
Yields on some government bonds edged up to fresh multi-year highs on Tuesday, as oil prices moved closer to the $100 mark and inflation fears continued to mount.
In early trading, the yield on the French 30-year government bond reached its highest level since April 2008, while the yield on Germany's benchmark 10-year bund hit its highest since early 2011.
— Chloe Taylor
Shares of Swiss pharma giant Novartis tanked 10% in early trading on Tuesday, after the pharma giant said its del-desiran drug for muscle-wasting disorder failed in a late-stage trial.
The company's stock was last seen down by 10%, as investors reacted to what was its third drug trial setback in a week. It put the shares on track for their worst trading day ever.
The del-desiran result comes just days after Novartis said its pelacarsen drug failed to reduce the risk of cardiovascular events in a late-stage trial, and a week after announcing it had paused eight clinical trials of an experimental cell therapy, rap-cel, after three patients died.
— Chloe Taylor
Asia-Pacific markets closed in the red on Tuesday.
South Korea's Kospi lost 0.58% to end the trading day at 6,954.52, while the small-cap Kosdaq declined 1.25% to 811.88.
Japan's Nikkei 225 fell 1.7% to 65,269.33, while the Topix index was down 1.83% at 4,050.33.
Mainland China's CSI 300 closed the 0.36% lower at 4,558.74, while Hong Kong's Hang Seng Index fell down 0.38% to 25,317.18.
Australia's S&P/ASX 200 lost 1% to 8,920.8.
— Lee Ying Shan
Stocks listed in Europe were broadly lower after the open on Tuesday, with the pan-European Stoxx 600 index down by 0.3% shortly after the opening bell.
All major regional bourses were in negative territory, with Switzerland's SMI leading losses on a 1.3% decline.
Oil and gas stocks moved higher as oil prices extended gains on Tuesday morning, while regional healthcare stocks sold off after Novartis posted disappointing trial results for its del-desirian drug for muscle-wasting disease.
— Chloe Taylor
In a note Tuesday morning, European equity strategists at Barclays said "quality is not working" as "rates remain in the driving seat."
"We turn Negative on Quality as sticky inflation continues to weigh on fundamentals, with no catalyst in sight," they said, adding that they had upgraded low volatility stocks to a neutral rating as "a better macro hedge."
"Persistent inflation and commodity-led leadership continue to work against [quality stocks]," they added. "Under the hood, Quality's features are deteriorating, with earnings stability no longer acting as an anchor … With valuations only back to long-run averages and profitability advantages narrowing, we see limited support for a sustained rebound."
— Chloe Taylor
Shares of Taiwan's Wistron Corporation fell over 5% Tuesday after the Nvidia supplier priced a $1.47 billion global depositary receipt offering to fund raw material purchases.
The company said Monday that it priced 25 million global depositary receipts at $58.88 each, representing 250 million new common shares, according to a company filing. The shares were priced at about $186.24 new Taiwan dollars each, roughly a 5.5% discount to Wistron's Monday closing price of NT$197.
The new shares represent about 7.29% of Wistron's outstanding shares before the issuance. Wistron said the offering is expected to be issued on Thursday, with the proceeds earmarked for purchases of raw materials in foreign currencies.
The company's shares are up about 23% so far this year.
The fundraising comes as Wistron expands its AI server business, with the company approving additional capacity investments in Taiwan and the U.S. last month.
—Jenny Lee
China's trade growth picked up in August, though imports missed expectations, a sign that domestic demand remains tepid as the world's second-largest economy faces mounting pressure to rebalance trade.
Exports grew 25% in U.S. dollar terms in August from a year earlier, official customs data showed Tuesday, in line with Reuters-polled analysts' forecast, quickening from 23.9% increase the previous month.
Imports rose 28.2% last month, missing economists' estimates of 30% in a Reuters poll, but gathering momentum from 27.5% in July. As a result, China's trade surplus swelled to $119.09 billion from $112.5 billion in July.
Exports have become the primary growth driver for China's economy, as surging demand for high-tech components amid a global build-out of AI infrastructure has helped cushion the drag from geopolitical shocks, sluggish domestic demand and a slump in investment.
—Anniek Bao
The Japanese yen strengthened 0.87% to 153 against the dollar on Tuesday, its strongest level since February, extending gains after hawkish comments from the Bank of Japan last week.
James Ooi, market strategist at Tiger Brokers, said the key question is whether the rally can be sustained, noting that previous rounds of intervention have provided only limited support as the U.S.-Japan interest-rate gap remains wide.
A rate hike by the Bank of Japan could also encourage some Japanese capital to return home, putting selling pressure on U.S. Treasurys, though Ooi said that would be a more manageable outcome than an excessively weak yen eventually forcing Japan to defend its currency through large-scale Treasury sales.
"From a U.S. perspective, a BOJ hike could put some selling pressure on US Treasuries as higher domestic rates encourage some Japanese capital to flow back home. But that is arguably the more manageable outcome for the U.S.," said Ooi.
—Lee Ying Shan
Oil prices extended gains Tuesday, rising for a third straight day, and hovering at six-week highs on worries over escalating Mideast tensions after the U.S. and Iran traded strikes over the weekend.
Futures for international benchmark Brent crude for November delivery gained 0.20% at $97.20 a barrel. U.S. West Texas Intermediate futures for October advanced 1.07% at $92.56 per barrel.
The U.S. military struck three Iranian oil tankers on Saturday after Iran launched ballistic missiles at two Navy warships. The Iranian Foreign Ministry, in a statement on Saturday, denounced the attacks on commercial vessels as a "war crime" and an act of "economic warfare."
"This appears to be a major escalation and tensions have once again ratcheted higher," said David Morrison, senior market analyst at Trade Nation, noting that U.S. Energy Secretary Chris Wright had said it may prove impossible to reach a deal with Iran to prevent it obtaining a nuclear weapon.
—Justina Lee
Asia-Pacific markets opened mixed on Tuesday.
South Korea's Kospi added 0.75%, while the small-cap Kosdaq Index rose 0.46%.
Japan's Nikkei 225 lost 0.95%, and the Topix was down 1.14%.
Australia's S&P/ASX 200 declined 0.22%.
— Lee Ying Shan
Asia-Pacific markets were set to open lower Tuesday, as oil prices rose amid concerns that the Iran conflict could drag on after the warring parties traded strikes over the weekend.
Japan's Nikkei 225 was set to fall, with the Chicago and Osaka futures contracts last at 65,860 and 66,070 respectively, compared with the index's previous close of 66,399.84.
Hong Kong's Hang Seng index futures were at 25,254, lower than the index's last close of 25,413.12.
Futures for Australia's S&P/ASX 200 last traded at 8,992 compared with the index's previous close of 9,010.9.
President Donald Trump said in a Truth Social post Monday that oil prices would "drop precipitously" once the U.S. wins the war with Iran, predicting gasoline prices could fall to $3 a gallon and ultimately below $2 a gallon. He also reiterated that Iran would not obtain a nuclear weapon.
U.S. Energy Secretary Chris Wright on Sunday said the U.S. may not reach a deal to constrain Iran from obtaining a nuclear weapon, as the U.S.-Iran conflict extends to a seventh month.
— Lee Ying Shan
President Donald Trump on Monday said Bombardier, a Canadian airplane manufacturer, must build its products in the U.S. in order to keep selling in the American market.
The move comes amid a bitter trade war between the U.S. and Canada, and on the eve of retaliatory tariffs set to take effect Tuesday on a range of U.S. goods.
"NO MORE SELLING BOMBARDIER IN THE UNITED STATES!" Trump wrote on Truth Social.
— Greg Iacurci
Overseas investors now favor U.S. stocks over Treasurys in what strategists say is a historic shift, as foreign appetite for American sovereign debt appears to sour.
"For the first time ever outside of the GFC, equity inflows into the U.S. have overtaken fixed income," George Saravelos, global head of FX research at Deutsche Bank, said in a note Thursday.
— Hugh Leask
Futures tied to the 30-stock averaged shed 332 points, or 0.6%. S&P 500 futures slipped 0.2%. Nasdaq-100 futures bucked the trend, rising 0.1%.
— Fred Imbert
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