U.S. stocks fell on Tuesday, September 1, 2026, the first trading day of the month, after renewed American strikes on Iranian military targets sent crude oil and Treasury yields sharply higher. The selloff hit technology and growth shares hardest and unwound part of August's rally, while gold slipped even as geopolitical risk intensified. Investors also raised their bets on a Federal Reserve interest rate hike this month as firmer energy costs fed back into the inflation conversation, keeping volatility elevated across equities, commodities and rates as the new month opened on a cautious note.

Major Indexes Retreat to Start September

The S&P 500 fell 0.71% to close at 7,631.47, the Dow Jones Industrial Average lost 419 points, or 0.79%, to finish at 52,766.88, and the Nasdaq Composite dropped 271 points, or 1.03%, to 26,099.77, with the tech-heavy index posting the session's steepest decline. Technology and other high-valuation growth names led the retreat as rising bond yields weighed on richly priced stocks. The pullback followed a strong August for equities and marked a second consecutive session of losses tied to the deepening confrontation between Washington and Tehran near the Strait of Hormuz.

Renewed Strikes Near the Strait of Hormuz

The selloff followed reports that U.S. forces launched new strikes on Iranian Revolutionary Guard targets after detecting attempts to threaten commercial shipping and American forces operating near the Strait of Hormuz. It marked a further round of direct military exchanges between the two sides, extending an escalation that began the previous session, and kept alive fears of broader disruption to Gulf energy supply routes that carry a significant share of global crude exports. Neither government signaled a near-term path toward de-escalation, leaving traders on edge for further headlines through the rest of the week.

Oil Jumps, Gold Slips as Yields and the Dollar Rise

West Texas Intermediate crude settled at $90.22 a barrel, up $4.46, or 5.2%, while Brent crude rose $4.16, or 4.6%, to settle at $94.65, with both benchmarks reaching their highest levels in weeks on concern over Gulf shipping routes. The 10-year Treasury yield traded near 4.77%, extending its recent climb, and the U.S. Dollar Index advanced 0.19% to 99.57. Gold, typically a safe-haven asset during geopolitical stress, still fell $85.10, or 1.9%, to settle at $4,396.40 an ounce, as the firmer dollar and higher real yields outweighed haven demand for bullion.

Fed Rate-Hike Bets Jump as Traders Eye Key Movers

Traders sharply raised the odds of a 25 basis point rate increase at the Federal Reserve's September 16 meeting, with CME FedWatch pricing in roughly 65% to 68% probability, more than double the level seen before Fed Chair Kevin Warsh's hawkish Jackson Hole remarks the prior week. Among individual stocks, Axon Enterprise slid about 8% on lingering margin concerns from its recent earnings report, while Moderna extended its recent rally with a gain of nearly 10% on continued reaction to August's cancer-vaccine trial data with Merck. Markets are likely to stay sensitive to further Middle East headlines in the sessions ahead.

Daily market analysis by BCM Markets.