Update: Wall Street's Pullback Deepens as Oil, Yields Surge

04:41 PM EDT, 09/01/2026 (MT Newswires) -- (Updates with market moves at the end of the day, and other changes, if any.) US equity benchmarks fell for a third straight session on Tuesday as traders fretted over surging oil prices and bond yields. The Nasdaq Composite closed 1% lower at 26,099.77, while the Dow Jones Industrial Average declined 0.8% to 52,766.88. The S&P 500 lost 0.7% to 7,631.47. Most sectors were in the red, led by consumer discretionary, while energy paced the gainers. West Texas Intermediate crude oil jumped 5.7% to $90.63 a barrel in Tuesday late-afternoon trade, while Brent advanced 5.1% to $95.11. The US military launched fresh attacks on Iran, striking Islamic Revolutionary Guard Corps targets, the US Central Command said Tuesday in a post on social media platform X. Iran vowed to retaliate and would "deliver crushing and devastating blows" against the "American enemy," state broadcaster IRIB reported, according to CNN. The latest US military actions came after Iran attacked US bases in Jordan, in retaliation for Washington striking Iranian rocket launchers on Tehran's Larak Island on Sunday. US Treasury yields jumped, with the 10-year rate up 3.4 basis points at 4.79%, reaching its highest level since January 2025. The two-year yield rose 4.4 basis points to 4.39%. "Higher yields are proving to be the stock market's undoing," Thierry Wizman, global foreign exchange and rates strategist at Macquarie Group, said in a note e-mailed to MT Newswires. "They force analysts to discount higher earnings more aggressively, thus forcing (price-to-earnings) multiples downward." Markets are now pricing in a 68% probability that the Federal Reserve will increase its benchmark lending rate by 25 basis points later this month, compared with about 40% a week ago, according to the CME FedWatch tool. The probability that the Fed will keep interest rates steady fell to 32% from 60%. The Fed should tighten monetary policy unless inflation cools down, Governor Michael Barr said Tuesday, adding to a growing chorus of hawkish views from policymakers. Fed Chair Kevin Warsh said Friday that the central bank's primary focus should be on prices, given that the US is doing well on the employment front. In economic news, the US manufacturing sector continued to expand in August, with an Institute for Supply Management survey pointing to a slight deceleration sequentially and S&P Global (SPGI) data indicating a steady growth rate. Official data are expected to show Friday that US economy added 55,000 nonfarm jobs in August, according to a Bloomberg-polled consensus. Employment unexpectedly fell in July amid a marked decline in government payrolls. In company news, Nio (NIO) posted a 69% year-over-year increase in its second-quarter revenue amid growth in vehicle deliveries, which are expected to continue rising in the ongoing quarter. The Chinese electric vehicle maker's American depositary receipts fell 4%. Palo Alto Networks (PANW) shares declined 5.2%. The company released its quarterly results after the closing bell Tuesday. Spot gold lost 2.5% to $4,328.41 per troy ounce, while silver dropped 3.4% to $64.72 per ounce.