TLDR
- US stock futures fell Tuesday, with Dow and S&P 500 futures down 0.5% and Nasdaq-100 futures dropping 1%
- Oil prices jumped after the US and Iran exchanged fire in the Strait of Hormuz, pushing Brent crude to over $92 a barrel
- The 10-year Treasury yield rose to 4.79%, raising fears of further Fed rate hikes
- September is historically the worst month for stocks, with the S&P 500 averaging a 1.1% drop
- Key data releases this week include JOLTS, ISM manufacturing, and the monthly jobs report on Friday
Wall Street started September on the back foot Tuesday as rising oil prices, climbing Treasury yields, and renewed fears of Federal Reserve rate hikes pushed futures lower across the board.
Dow Jones Industrial Average futures slid around 255 points, or 0.5%. S&P 500 futures fell 0.5% and Nasdaq-100 futures dropped 1%, erasing some of the momentum built during a strong August.
All three major indexes closed August with solid gains. The S&P 500 posted its best August performance in five years. But history is working against markets now as September is on average the weakest month of the year for stocks.
The S&P 500 typically falls around 1.1% in September. Analysts say investors are already aware of the seasonal headwind.
Oil Prices Jump After US-Iran Military Clashes
A fresh flare-up in the conflict between the US and Iran sent crude prices higher on Tuesday. The two countries exchanged fire in the Strait of Hormuz over the weekend, rattling energy markets.
TWO SAUDI OIL TANKERS HIT IN HORMUZ
Two tankers carrying Saudi crude were struck by unknown projectiles Monday while exiting the Strait of Hormuz.
Each vessel was carrying 2 million barrels of oil. All crew members were reported safe.
The attacks come as U.S.-Iran tensions and…
— *Walter Bloomberg (@DeItaone) September 1, 2026
Brent crude futures climbed 1.8% to $92.07 a barrel. West Texas Intermediate rose 1.8% to $87.28 a barrel.
Higher oil prices could push inflation higher, which could lead the Fed to raise interest rates again. That concern is already showing up in the bond market.
The yield on the 10-year Treasury note rose 3 basis points to 4.79% early Tuesday. Higher yields make borrowing more expensive and put pressure on stock valuations.
Kathleen Brooks, research director at XTB, said investors had grown used to the Iran conflict being more of an economic standoff. The return of actual military strikes adds a new risk for markets to price in.
Jobs Data and Earnings in Focus This Week
Investors are watching a busy week of economic data. The Job Openings and Labor Turnover Survey releases Tuesday, giving the first look at the labor market before Friday’s monthly jobs report.
Manufacturing data from S&P Global and the Institute for Supply Management will also drop this week.
On the earnings front, Dell and Palo Alto Networks are set to report results. Their numbers could show how companies are spending on technology and cloud services.
Stock futures entered September with double-digit year-to-date returns still intact. But rising oil, higher yields, and a shaky geopolitical backdrop have put investors on guard as the historically weak month begins.
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