Dow falls 350 points as oil jumps above $100 for first time since July

Stocks fell Wednesday and Treasury yields ticked up after oil jumped above $100 a barrel, reheating concerns about inflation that could push the Federal Reserve to hike interest rates.The Dow Jones Industrial Average fell 367 points, or 0.7%, by approximately 10:00 a.m.ET, while the S&P 500 and Nasdaq slumped 0.3% each.Brent crude oil futures jumped 2.9% to $100.77 a barrel Wednesday morning – passing the $100 level for the first time since July – while West Texas Intermediate rose 2.9% to $95.73. As investors feared a prolonged Middle East conflict could keep energy prices elevated and push inflation even higher, the US 10-year Treasury yield briefly ticked up to 4.806% – passing the closely-watched 4.8% level – and the 2-year Treasury yield jumped to 4.415%. Lawrence Gillum, chief fixed income strategist for LPL Financial, said the rapid bond sell-off signals traders are preparing for an interest-rate hike at the Fed’s Sept.

16 meeting.“A gap of roughly 60 to 85 basis points between the federal funds target range and the 2-year Treasury yield is the market telling you it expects the next move to be a hike, not a cut,” Gillum wrote in a note.“We still think the bar for a hike is higher than a Fed on hold, but with probabilities hovering near 50%, the risk that the market will force Fed action is not off the table,” he added.Renewed hostilities amid the war with Iran stoked concerns that energy supply disruptions could last months longer, as the Strait of Hormuz – a vital maritime route for 20% of the world’s oil – is caught between the warring nations.US Central Command said late Tuesday that American forces had destroyed five Iranian oil tankers near Kharg Island, Tehran’s energy hub, in the latest escalation as it attempts to squeeze the nation’s economy. In the meantime, national average gasoline prices at home have remained stubbornly high, climbing to $4.22 a gallon as of Wednesday, according to AAA. Major stock indexes als...