Surge in Oil Prices and Uncertainty from the Fed Weigh on New York Stock Market
By ATTN Desk · Editorial oversight: Sean Han
On the first trading day after the Labor Day holiday in New York on the 8th local time (early morning of the 9th in Korean time), the U.S. stock market showed weakness. The S&P 500 index fell 0.6% to 7,673.52, the Dow Jones dropped 1.2% to 52,786.07, and the Nasdaq closed down 0.3% at 26,421.41.
What weighed most heavily on the market was an oil price shock emanating from the Middle East. As the conflict with Iran intensifies, Brent crude spiked intraday to $99.46 and closed at $97.92, up 0.9% from the previous day. Investors, mindful that a surge in energy prices could reignite inflation, reduced their exposure to risk assets.
Uncertainty surrounding the Federal Reserve also fueled selling sentiment. Since this week’s release of U.S. August producer and consumer price indices will serve as the final basis for the September Federal Open Market Committee (FOMC) decision, the possibility of an additional Fed rate hike has come back into focus. The interest rate futures market is pricing in roughly a 60% chance of a modest 25-basis-point increase in September, while the yield on the 10-year U.S. Treasury remains around 4.8%.
On the policy and trade front, North American trade tensions reignited as Canada imposed retaliatory tariffs on approximately $20 billion worth of U.S. goods. At the same time, rising tensions in the Gulf—underscored by the U.S. sinking of an Iranian tanker—have heightened concerns over oil supply disruptions, pushing up the global risk premium.
On the corporate side, there were significant AI-related announcements, but they weren’t enough to stem the market decline. Qualcomm’s shares rose about 3% after it announced a long-term collaboration with Amazon to jointly develop next-generation AI data-center chips, and AMD surged over 5% after projecting a $2 trillion AI market. Meanwhile, healthcare and consumer stocks—sensitive to rising oil prices and interest rate pressures—weakened, adding downward pressure to the broader indices.