Nasdaq Drops 271 Points, Dow Sheds 419 as US Strikes Iran and Oil Surges Past $90

Mumbai, Sept 2: US stock markets commenced September on a sharply negative note, with all three major indices closing lower as renewed US military strikes against Iran sent crude oil prices soaring past $90 per barrel and propelled government bond yields to multi-year highs. The escalation in geopolitical tensions, combined with hawkish signals from Federal Reserve officials, reinforced investor concerns over persistent inflation and the prospect of further monetary tightening. 

The tech-heavy Nasdaq Composite declined 271.12 points, or 1.03%, to settle at 26,099.77. The blue-chip Dow Jones Industrial Average shed 419.02 points, or 0.79%, closing at 52,766.88. The broader S&P 500 fell 54.67 points, or 0.71%, ending the session at 7,631.47. The losses marked the second consecutive day of declines for Wall Street, erasing some of the gains accumulated during August, which had seen the Dow post its fifth straight monthly advance. 

Dow Jones Falls 419 Points to 52,766.88 as 22 of 30 Stocks Decline; Chevron Gains 2.35% on Oil Rally 

The Dow Jones Industrial Average opened at 53,083.58 and touched an intraday high of 53,176.60 before sliding to a low of 52,691.31. The index closed at 52,766.88, down 419.02 points or 0.79% from the previous close of 53,185.90. 

The decline was broad-based, with 22 of the 30 Dow components finishing in negative territory. Caterpillar led the losses, tumbling 2.30%, followed by Home Depot, which dropped 2.53%, and Goldman Sachs, which fell 1.92%. American Express declined 1.81%, while Honeywell shed 1.66% and Boeing fell 1.04%. On the upside, Chevron surged 2.35% as oil prices rallied, while Johnson & Johnson gained 2.07% and UnitedHealth rose 1.79%.  

Apple climbed 2.63% on the first day of John Ternus’s tenure as chief executive officer. Trading volume for the Dow stood at 398,868,042 shares, well below the average volume of 513,845,396. The index’s 52-week range currently spans 44,948.16 on the low end to 54,744.33 at the high end. 

S&P 500 Falls 0.71% to 7,631.47 as 9 of 11 Sectors Decline; Consumer Discretionary Slides 1.8 

The S&P 500 opened at 7,635.47 and reached a session high of 7,663.63 before falling to a low of 7,611.20. The index closed at 7,631.47, a decline of 54.67 points or 0.71% from the previous close of 7,686.14. Nine of the 11 primary sectors ended the session in negative territory. Consumer discretionary was the worst-performing sector, plummeting 1.89% as higher energy costs threatened to dampen consumer spending and travel demand. Communication services dropped 1.63%, while utilities fell 1.18%. Energy emerged as the top-performing sector, surging 1.54% on the back of rising crude prices. Information technology managed a modest gain of 0.30%.  

Health care also posted gains, with the sector advancing 0.75% as investors rotated into defensive names. Trading volume for the S&P 500 reached 2,701,618,000 shares, compared to the average of 5,290,566,031. The index’s 52-week range stands between 6,316.91 and 7,816.70. 

Nasdaq Composite Falls 1.03% or 271 Points to 26,099.77; Chip and Software Stocks Lead Declines 

The Nasdaq Composite opened at 26,031.67 and hit a session high of 26,260.68 before dropping to a low of 25,995.53. The index closed at 26,099.77, down 271.12 points or 1.03% from the previous close of 26,370.89. The tech sector bore the brunt of the selling, with semiconductor stocks leading declines. Nvidia slipped 1.37%, while Advanced Micro Devices fell 2.34% and Micron Technology declined 2.68%. Broadcom edged down 0.20%. Among software names, Palantir dropped 3.50%, Adobe declined 2.33%, and Intuit slid 4.01%.  

CrowdStrike plummeted 6.91% and Palo Alto Networks fell 5.26% ahead of their earnings releases. On the positive side, Apple gained 2.63% as investors welcomed the leadership transition. Meta Platforms rose 1.09%, while Alphabet fell 1.26%. Tesla dropped 3.24% after surging 18% in August. The Nasdaq’s trading volume was 5,642,299,000 shares, compared to the average of 9,208,454,285. The index’s 52-week range is between 20,690.25 and 27,190.21. 

Russell 2000 and Mid/Small-Cap Indices Underperform Amid Risk-Off Shift 

The Russell 2000 Index, a benchmark for small-cap stocks, fell 37.68 points, or 1.27%, to close at 2,918.77. The index opened at 2,943.43 and reached a high of 2,943.43 before declining to a low of 2,916.84. Small-cap stocks underperformed their larger peers as rising yields and geopolitical uncertainty weighed more heavily on smaller companies with higher borrowing costs.  

Within the Russell, MMED soared 10.66%, while CRDO plunged 8.54% and ERAS tumbled 6.32%. The index’s 52-week range is 2,303.46 on the low end and 3,069.71 at the high end. The S&P MidCap 400 Index fell 41.75 points, or 1.11%, to close at 3,718.49, while the S&P SmallCap 600 Index declined 21.05 points, or 1.20%, settling at 1,734.65. Mid and small-cap stocks suffered as rising borrowing costs and geopolitical risks prompted investors to rotate into larger, more liquid names. 

Also Read: How to Invest in the US Stocks From India

Dow Jones Transportation Falls 2.51% to 20,767; Higher Fuel Costs Weigh on Travel Demand 

The S&P 100 Index (OEX) fell 23.48 points, or 0.62%, to settle at 3,777.66. The index opened at 3,771.89, traded between a low of 3,766.51 and a high of 3,797.75, and closed below its previous level of 3,801.14. The Dow Jones Composite Average (DJC) declined 173.85 points, or 1.04%, ending at 16,578.04. It opened at 16,722.66 and traded between 16,534.66 and 16,722.66.  

The Dow Jones Transportation Average (DJT) tumbled 534.65 points, or 2.51%, to close at 20,767.36, reflecting concerns over higher fuel costs and reduced consumer travel demand. The index opened at 21,253.61 and hit a low of 20,662.79. The Dow Jones Utility Average (DJU) was the only gainer among the sub-indices, rising 9.35 points, or 0.88%, to end at 1,072.51, as investors sought defensive havens amid heightened volatility. 

Philadelphia Semiconductor Index (SOX) Drops 2.14% as Chipmakers Face Headwinds 

The PHLX Semiconductor Sector (SOX) fell 246.44 points, or 2.14%, to close at 11,288.61. The index opened at 11,296.63 and hit a high of 11,389.62 before dropping to a low of 11,172.90. Chip stocks were under pressure as rising bond yields and inflationary fears weighed on growth-oriented sectors. Notable decliners included Lam Research, which fell 3.74%, and Applied Materials, which dropped 3.63%.  

KLA Corporation declined 2.60%, while Teradyne fell 5.40% and Lumentum dropped more than 5%. The SOX’s 52-week range is between 5,503.12 and 14,655.29. The NYSE Composite Index declined 121.93 points, or 0.50%, to finish at 24,340.01. The index opened at 24,461.94 and traded between 24,316.61 and 24,526.70. Its 52-week range is 20,894.59 to 24,866.75. 

Apple Rises 2.63% to $325.13 as CEO Transition Unfolds; Tesla Falls 3.24% to $355.70 Ahead of Cybercab Event 

The Roundhill Magnificent Seven ETF (MAGS) closed 0.7% lower, reflecting mixed performances among the mega-cap technology giants. Apple stood out as the sole major winner, climbing 2.63% to $325.13 as John Ternus officially took over the chief executive role from Tim Cook, with investors adopting a wait-and-see approach to the new leadership’s strategic direction. Meta Platforms also advanced, rising 1.09%, as the social media giant continued its recent recovery from earlier summer lows.  

On the losing side, Tesla dropped 3.24% to $355.70, surrendering a portion of Monday’s 5.5% rally as profit-taking emerged ahead of the company’s highly anticipated cybercab unveiling scheduled for Thursday in Austin, Texas. Amazon declined 1.91% amid news of a lawsuit filed by the Federal Trade Commission and 22 states, alleging the e-commerce giant concealed unfair charges in its digital advertising auction pricing. Nvidia slipped 1.37%, Microsoft lost 1.25%, and Alphabet declined 1.26%, as rising bond yields reduced the present value of future earnings for these growth-dependent names. 

Novartis Surges 7% on Trial Data, While Dell and CrowdStrike Sink Over 6%; Oil Rally Lifts Chevron and Exxon 

Among the standout gainers on the S&P 500, Novartis surged 7% following encouraging Phase 3 clinical trial data for its remibrutinib multiple sclerosis drug, which demonstrated robust relapse prevention and a favourable safety profile. Moderna added 5%, extending its August surge of 156% as optimism around its cancer vaccine candidate, developed jointly with Merck, continued to build. Chevron gained 2.35%, and Exxon Mobil advanced 2.22%, buoyed by the spike in crude prices. UnitedHealth rose 1.79% and Johnson & Johnson climbed 2.07% as defensive rotations benefited healthcare names.  

On the losing side, Dell Technologies plummeted 6.80%, while CrowdStrike cratered 6.91% and Palo Alto Networks shed 5.26% ahead of their quarterly results after the closing bell. Carvana tumbled nearly 3%, weighing on the consumer discretionary sector. Notably, Nike hit a 52-week low at $38.07, marking its lowest valuation in over two decades, while Marathon Petroleum touched a 52-week high at $381.15, levels not seen since June 2011. Pfizer also reached a 52-week high at $29.09, its highest since October 2024. 

Also Read: How to Invest in S&P 500 Stocks Through Index Funds

US-Iran Hostilities Push Brent Crude 4.6% to $94.65; Shipping Strikes Renew Inflation Concerns 

The primary catalyst for Tuesday’s selloff was the escalation in Middle East hostilities. US Central Command confirmed that American forces had struck Islamic Revolutionary Guard Corps (IRGC) targets in Iran in retaliation for recent attacks on commercial shipping in the Strait of Hormuz and on US military positions in Jordan. This marked the first publicly acknowledged US strike on Iranian positions since late July.  

President Donald Trump warned that further strikes would follow if Iran retaliated, stating on social media that the response would be “much harder and higher level.” The state-affiliated Tasnim News Agency indicated that Iran’s response would be “more severe,” targeting US military bases and economic interests in the region.  

The resumption of kinetic action came as two oil supertankers, one each owned by Saudi Arabian and South Korean shipping companies, were struck by projectiles while attempting to exit the strait. Brent crude futures, the global benchmark, surged 4.6% to close at $94.65 per barrel, while US West Texas Intermediate (WTI) crude jumped 5.2% to settle at $90.22 per barrel. The spike in oil prices reignited inflation concerns, as higher energy costs threaten to filter through the broader economy. 

US 10-Year Treasury Yield Rises to 4.79% as Global Bond Yields Hit Multi-Year Highs; Rate-Hike Bets Jump to 68% 

The selloff in equities was accompanied by a sharp rise in global government bond yields, as traders priced in the inflationary impact of higher energy costs alongside hawkish central bank signals. The US 10-year Treasury note yield climbed 4.8 basis points to 4.79%, its highest intraday level since January 2025.  

The 30-year Treasury yield rose to 5.27%, hovering near two-decade highs. Japan’s 10-year government bond yield jumped more than 6 basis points to cross 3% for the first time since 1996, while the short-term 2-year government bond yield touched a 31-year high of 1.81%.  UK 10-year gilt yields surged to 5.25%, their highest since June 2008, and the 30-year gilt yield soared to 5.89%, its highest since March 1998. German 10-year bund yields reached levels last seen during the European debt crisis in 2011. 

The global bond market rout was fueled by a combination of higher oil prices, hawkish signals from Federal Reserve Chairman Kevin Warsh, and heavy sovereign and corporate debt issuance. Traders are now pricing in a 68% probability of a Federal Reserve rate hike at the September meeting, according to the CME FedWatch tool, up from about 40% a week ago. 

JOLTS Job Openings Rise to 7.27 Million While Hiring Falls; ISM Manufacturing Slows to 54.6 

The Job Openings and Labor Turnover Survey (JOLTS) showed that job openings edged up slightly to 7.27 million in July, roughly in line with expectations of 7.3 million and up from June’s downwardly revised 7.2 million. Hiring declined by 278,000, taking the hiring rate down to 3.2%, its lowest since February 2020. The quits rate fell to 1.9% from 2.0% in June, indicating that workers are becoming less confident about leaving their jobs, while layoffs remained subdued at 1.0%.  

The data reinforced the narrative of a “low-hire, low-fire” labour market, with employers growing cautious amid geopolitical uncertainty and rising borrowing costs. The ISM Manufacturing Index came in at 54.6 for August, down from 55.6% in July and slightly below the consensus estimate of 55.3.  

The prices index remained unchanged at 71.1, indicating persistent input cost pressures, while the employment component edged down to 51.2 from 52.8. Readings above 50 indicate expansion, suggesting the manufacturing sector continues to grow, albeit at a moderating pace. 

Energy Gains 1.54% as Oil Prices Surge; Consumer Discretionary Falls 1.89% on Higher Costs and Rates 

Among the 11 S&P 500 sectors, Energy was the sole standout, rising 1.54% as oil prices surged. Energy-focused exchange-traded funds, including the State Street Energy Select Sector SPDR ETF (XLE), hit fresh all-time intraday highs, while the SPDR S&P Oil & Gas Expl & Prod ETF (XOP) scored a multi-year high. Consumer discretionary was the worst performer, falling 1.89%, as higher energy costs and rising interest rates threaten to crimp consumer spending on big-ticket items and travel.  

Communication services dropped 1.63%, weighed down by declines in Alphabet and other advertising-dependent names despite Meta’s modest gain. Industrials fell 1.12%, with defence and aerospace names like Lockheed Martin sliding 2.41% and Boeing falling 1.04%. Materials declined 0.98% amid broad-based commodity weakness outside of oil. Utilities dropped 1.18%, and real estate slipped 0.85%. Financials fell 0.62%, with Goldman Sachs and JPMorgan both in the red, though Wells Fargo managed a 0.76% gain. 

Volatility Indices Spike as VIX Surges 15.2% 

The CBOE Volatility Index (VIX), often referred to as Wall Street’s fear gauge, surged 15.2% to close at 22.45, reflecting heightened investor anxiety. The rise in the VIX indicates increased demand for options protection as markets grappled with geopolitical risks, rising yields, and the prospect of Federal Reserve tightening. The CBOE Nasdaq Volatility Index (VXN) jumped 12.8% to 28.70, while the CBOE S&P 500 3-Month Volatility Index (VIX3M) advanced 8.5% to 24.15, suggesting that volatility expectations have extended beyond the near term and that market participants are bracing for continued turbulence through the end of the quarter. 

Also Read : US Stock Market Timings

Brent Crude Rises 4.6% to $94.65; Gold Falls 2.3% to $4,375 as Dollar Strength Weighs on Bullion 

In commodity markets, Brent crude futures settled at $94.65 per barrel, up 4.6%, while WTI crude closed at $90.22, up 5.2%. The rally was driven by the resumption of US-Iran hostilities and reports of two oil tankers being struck in the Strait of Hormuz.  

Natural gas futures also advanced, while industrial metals like copper fell on demand concerns. Gold futures fell 2.3% to $4,375 per ounce, as rising Treasury yields and a stronger dollar reduced the appeal of the non-yielding metal. Silver also declined, tracking gold lower.  

The US Dollar Index (DXY) advanced 0.3% to 99.68, as safe-haven demand flowed into the greenback. The euro weakened against the dollar, with EUR/USD falling to 1.1125, while the Japanese yen depreciated as the USD/JPY pair climbed to 148.30, reflecting the widening yield differential between US and Japanese bonds. The British pound traded at 1.3120 against the dollar, down 0.4% amid broader dollar strength. Bitcoin dropped 3% to $76,500, as risk-off sentiment weighed on cryptocurrencies, erasing gains from the previous week’s brief rally above $80,000. 

With oil prices testing $95 and bond yields at multi-year highs, market participants are recalibrating expectations for Federal Reserve policy, with Fed funds futures now pricing a 68% probability of a September rate hike. The upcoming August nonfarm payrolls report on Friday will provide crucial insights into labour market conditions and could significantly influence the Fed’s decision. Meanwhile, geopolitical developments in the Middle East remain a key wildcard, with any further escalation likely to sustain pressure on energy prices and global risk assets in the near term. Investors are closely monitoring the Federal Reserve’s communications and the trajectory of global bond yields for clues on the sustainability of the equity market’s valuation multiples. 

Source 

• https://www.nasdaq.com/ 

• spglobal.com/spdji/en/indices/equity/sp-500/ 

• https://www.dowjones.com/ 

• https://www.spglobal.com/spdji/en/indices/equity/dow-jones-industrial-average/ 

• https://www.spglobal.com/spdji/en/indices/equity/sp-500/ 

• https://www.nasdaq.com/market-activity/index/comp 

• https://www.nasdaq.com/market-activity/quotes/nasdaq-ndx-index 

• https://www.spglobal.com/spdji/en/indices/equity/sp-100/ 

• https://www.lseg.com/en/ftse-russell/indices/russell-us 

• https://www.nyse.com/index 

• https://www.nyse.com/index 

• https://www.spglobal.com/spdji/en/indices/equity/dow-jones-transportation-average/ 

• https://www.spglobal.com/spdji/en/indices/equity/dow-jones-utility-average/ 

• https://www.spglobal.com/spdji/en/indices/equity/dow-jones-composite-average/ 

• https://www.nasdaq.com/market-activity/index/sox 
• https://www.cboe.com/tradable_products/vix/