Oil Surge and Inflation Drive US Market Slump

U.S. stock indices fell for four consecutive sessions ending September 10, 2026, as Brent crude oil surpassed $108 per barrel and West Texas Intermediate topped $100. The price spike followed a seven-month war of attrition between the United States and Iran, characterized by U.S. strikes on Iranian tankers and retaliatory attacks on ships in the Strait of Hormuz. Further instability occurred as Iran-aligned Houthi militants seized the port city of Mocha in Yemen, threatening Red Sea oil flows.

Inflationary pressures intensified as the Bureau of Labor Statistics reported that August wholesale prices rose 5.4% annually, driven by a 24.1% surge in diesel costs. Consumer prices also increased 0.4% in August, with gasoline prices averaging $4.192 per gallon. These figures, combined with a $6 billion Treasury bond buyback that failed to soothe investors, pushed 10-year Treasury yields toward 5% and 30-year yields to their highest levels since 2004.

In response, the European Central Bank raised its key interest rate by one-quarter point. Market traders now price a 70% to 73% probability that the Federal Reserve will raise rates at its September 15-16 meeting. President Donald Trump stated that oil prices likely will not fall until after the November midterm elections, while simultaneously pressuring the Federal Reserve to cut rates. Despite the broader market decline, Apple Inc. shares rose following the launch of a new foldable iPhone.