U.S. Stocks Fall as Oil Prices and Inflation Fears Rise

U.S. stock indexes closed lower on August 31, 2026, driven by spiking crude oil prices that revived inflation fears and increased the likelihood of tighter monetary policy. The Dow Jones Industrial Average fell 374.09 points, the S&P 500 lost 25.62 points, and the Nasdaq Composite declined 31.53 points, though all three indexes maintained overall gains for the month of August.

Market volatility followed a hawkish speech by Kevin Warsh, Chair of the Federal Reserve, at the Jackson Hole Symposium. These signals, combined with escalating hostilities in the Middle East and the closure of the Strait of Hormuz, led markets to price in a 65% probability of a 25-basis-point interest rate hike in September.

In the corporate sector, PG&E Corporation shares plunged 20.1% after a California senate bill amendment altered wildfire liabilities. Conversely, GameStop shares rose 2.9% after the company announced it would use cash to pay approximately 27% of a $1.4 billion debt exchange.