Dow falls 450 points while rising oil prices send Treasury yields racing toward 5%, Iran fears renewed

Stocks fell Tuesday while rising oil prices pushed bond yields higher, a bumpy start to the month as investors fear renewed fighting in Iran could inflate prices and convince the Fed to hike interest rates.The Dow Jones Industrial Average plunged 449 points, or 0.9%, by about 3:45 p.m., while the S&P 500 and Nasdaq slumped 0.8% and 1.1%, respectively. Oil prices rose after President Trump announced the US had unleashed a fresh wave of strikes on Iran, marking the second such uptick in two days.Brent crude oil futures jumped 5% to $95 a barrel and West Texas Intermediate rose 5.3% to $90.33.National average gasoline prices remained above $4 a gallon.The US 10-year Treasury yield soared to 4.796%, the highest level since January 2025.

It has risen roughly 40 basis points since the end of June, causing concern among market watchers.The US 30-year Treasury yield reached 5.286%, near the 19-year highs it reached last month.The pressure isn’t confined to US debt.Government borrowing costs have climbed sharply across several major economies, including Japan, Germany, Britain and France, as investors reassess inflation, fiscal risks and the outlook for interest rates.In Japan, the benchmark 10-year yield reached roughly 3% Tuesday – a level not seen since 1996.

Britain’s 10-year was around 5.25%, while Germany’s stood around 3.37%. Yields have been rising as investors fear a prolonged Middle East conflict could keep oil prices elevated, drive inflation higher and push the Federal Reserve to raise interest rates at its meeting on Sept.16.As bond prices fall, yields move higher, and higher yields can raise borrowing costs for consumers across mortgages, auto loans and credit cards.Nic Puckrin, cross-asset analyst and founder of Coin Bureau, noted that August was an unusually strong month for the stock market.“But now that we’re in September, the summer party for risk assets is over,” Puckrin said in a Tuesday note.

“Prepare for a sell-off, especially ...