S&P 500 Falls for Second Day

The S&P 500 fell for a second straight session on 8 September, driven lower by surging crude prices that heightened inflation concerns before the upcoming Federal Reserve policy meeting. The Dow Jones Industrial Average dropped about 1.17%, while the Nasdaq Composite lost 0.32%. US Treasury bonds also slipped, pushing yields higher across the curve.

Energy markets drove the move after attacks on Middle Eastern facilities raised disruption risks. Brent crude rose 1% to settle at $97.92 per barrel after testing the $100 mark during the day, reaching its highest level since late July. West Texas Intermediate gained 1.7% from Friday to close at $93.03 per barrel, its highest mark since early June. Brent has gained over 60% this year, while European diesel approached $200 per barrel.

Crude climbed following reports from Iranian news agency Mehr of explosions at the Kharg Island anchorage, Iran's main export hub. In Saudi Arabia, authorities halted operations at several facilities after Houthi attacks, including strikes targeting the 400,000-barrel-per-day Jazan refinery. Russell Hardy, CEO of Vitol, estimated the market has lost around 2 million barrels daily of Middle East exports and 2 million barrels daily from Russia, with Strait of Hormuz flows down to about 10 million barrels per day.

Rising oil prices lifted expectations for Federal Reserve policy tightening. Money markets priced in a greater than 50% probability of an interest rate increase this month. Economists surveyed by Bloomberg project the August consumer price index rose 0.4% month on month, with core inflation rising 0.2% to reach an annual rate of 2.4%.

In other commodities, spot gold slipped 0.2% to $4,397.75 per ounce and silver fell 0.2% to $66.02 per ounce. Copper advanced for a fourth consecutive session, reaching a record $14,635 per metric ton, up roughly 17% this year. In currency trading, the Japanese yen gained 1% to 152.89 per dollar, while the US dollar index traded near 98.85 points.