US benchmark indices tumbled during the trading session Tuesday, September 8 as oil prices near $100 and concerns about higher interest rates just days ahead of inflation data.
Dow Jones fell 1.26% or over 600 points near 52,741, S&P 500 declined 0.5% or nearly 35 points at 7,680.02, while Nasdaq traded 0.42% or 112 points lower at 26,394.8.
Stock futures were down on the backdrop of several global cues, including US Canada tensions, rally in oil prices and Fed's rate hike bets.
Oil Gains
Oil prices traded near $100 a barrel as traders assessed the possibility of a framework led by Iran-Oman to manage shipping through the Strait of Hormuz against renewed buying by China and continued risks to regional energy supplies.
Brent crude has surged 1.6% over the past two sessions, while West Texas Intermediate was trading above $92. Brent touched above $98 on Monday as escalating US-Iran tensions pushed the benchmark to its highest level in nearly six weeks.
US-Canada Trade Tensions
US stocks are under pressure as trade tensions between US and Canada escalate, with the latter likely to impose tariffs of 15% to 50% on hundreds of American products. Except a last-minute reprieve, Carney's government will increase the import tax on many US steel items to 50% from 25% and apply tariffs to a range of consumer items - motorcycles, cosmetics, cheese and more. The measure will hit US exporters particularly hard in states such as Michigan and Ohio that do a lot business with Canada and host heated races in November's midterm elections.
Fed's Rate Hike Bet
Investors are also focusing on the possibility of a rate hike at Fed's meeting in Setember, likely to hinge on government inflation data. According to Bloomberg, economists estimate the consumer price index to advance 0.4% in August, an acceleration from a month earlier, due in part to higher gasoline costs.There is 58% chance the central bank will raise rates by a quarter-percentage point after the meeting, according to the CME Group's FedWatch tool.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
