Ankara: US stocks closed in the red Thursday as surging oil prices and Treasury yields intensified concerns about inflation and the economic effects of the prolonged US-Iran war. The Dow Jones Industrial Average fell 316.56 points, or 0.6%, to 52,064.10. The SandP 500 declined 0.58% to 7,591.70, while the Nasdaq Composite dropped 0.65% to close at 26,081.72. All three major indexes recorded their fourth consecutive daily decline.
According to Anadolu Agency, oil prices continued to weigh on investor sentiment as the war between the US and Iran entered its seventh month. US benchmark West Texas Intermediate crude settled 7.1% higher at $102.93, while international benchmark Brent gained 7% to $108.28 per barrel. WTI has risen 52.9% since the war began at the end of February, and 78.5% since the beginning of the year. The jump in oil prices pushed the yield on the 10-year US Treasury note above 4.95%, its highest since October 2023. The CBOE Volatility Index, also known as Wall Street's 'fear index,' increased 8.38% to 17.84.
US producer inflation also weighed on markets. The Producer Price Index rose 0.4% month-on-month in August and 5.4% annually, accelerating from July's revised annual increase of 4.8%. Producer prices excluding food, energy and trade services increased 0.3% on a monthly basis and 4.7% from a year earlier. Energy prices climbed 4.2% during the month, driven partly by a 24.1% surge in diesel fuel prices, intensifying concerns that elevated energy costs could keep inflationary pressures persistent and influence the Federal Reserve's upcoming interest-rate decision.
Technology and semiconductor shares came under pressure amid concerns that higher borrowing and energy costs could slow economic activity. Intel shares fell more than 5.5%, while Micron Technology declined 4.9%.
European stock markets also ended lower as escalating US-Iran tensions, rising oil prices, and the European Central Bank's interest-rate increase weighed on investor sentiment. The ECB raised its three key policy rates by 25 basis points, warning that geopolitical conflicts were continuing to fuel inflationary pressures. The pan-European Stoxx Europe 600 index fell 0.69% to 635.97 points. Britain's FTSE 100 dropped 0.57% to 10,608.92, Germany's DAX 40 declined 0.84% to 25,361.15, and France's CAC 40 lost 0.49% to 8,116.76. Italy's FTSE MIB 30 index edged down 0.13% to close at 51,807.40, and Spain's IBEX 35 fell 0.18% to close at 19,659.80.