S&P 500 Falls for Fourth Consecutive Day
Oil prices climbed to their highest level since May, intensifying market concerns over inflation and bond yields. The S&P 500 fell 0.6% on Thursday, marking its fourth consecutive day of losses—its longest losing streak since June. The Dow Jones Industrial Average dropped 316 points, and the Nasdaq Composite declined by 0.7%.
Brent crude surged 6.3% in a single day, briefly surpassing $108 per barrel before settling at $107.63. Since early July, Brent has rallied significantly from below $72, driven by ongoing disruptions to Middle Eastern crude transportation.
Energy Costs Drive Inflation Higher Again
The average price for regular gasoline in the U.S. has risen to about $4.28 per gallon, up nearly 34% year-over-year. Higher fuel costs impact not only consumer spending at the pump but also filter through to goods prices via trucking and transportation.
The U.S. wholesale inflation rate (Producer Price Index) increased to 5.4% in August from 4.8% in July. Businesses may pass these higher input costs on to consumers, leading the market to pay close attention to Friday's Consumer Price Index (CPI) report.
10-Year Yield Rises to 4.95%
Inflation fears have pushed U.S. Treasury yields sharply higher, with the 10-year yield reaching 4.95%—up nearly one percentage point since the start of the U.S.-Iran war. Higher risk-free yields weaken stock valuations and increase corporate borrowing costs.
The S&P 500 remains not far from its all-time high last month, but simultaneous increases in oil prices, PPI, and long-term interest rates are making a sustained rebound more difficult. The market's next direction will hinge on whether the CPI report further strengthens expectations for monetary tightening and whether crude supplies from the Middle East can be restored.
