US stocks close lower as Brent tops $101 and Dow falls more than 400 points

US stocks closed lower on Wednesday as Brent crude surged above $100 a barrel, while Apple shares declined and Treasury yields rose ahead of key inflation data due later this week.

At the close, the Dow Jones Industrial Average fell 0.8%, or 405 points, to 52,380.77. The S&P 500 dropped 0.5%, or 37 points, to 7,636, while the Nasdaq Composite declined 0.6%, or 168 points, to 26,263.

Concerns over global oil supplies and escalating tensions in the Middle East pushed Brent crude above $100 a barrel, a psychologically important level for equity markets. The US-Israeli war with Iran, now in its seventh month, has fueled fears of a broader regional conflict, while higher oil prices are adding to inflationary pressures.

The S&P 500 energy sector rose 1.1%, while all other sector indexes declined.

Apple shares closed 0.3% lower after the company held its first smartphone launch event under new Chief Executive John Ternus.

The benchmark 10-year US Treasury yield climbed to its highest level since November 2023 after the Treasury Department announced plans to buy back up to $6 billion of government securities with maturities between 10 and 20 years. Some analysts had expected a larger operation worth between $8 billion and $10 billion.

Higher yields on risk-free government bonds make stocks less attractive to investors.

Inflation data in focus as markets bet on rate hike

US Producer Price Index data due on Thursday and Consumer Price Index figures scheduled for Friday will be closely watched for clues about the Federal Reserve’s interest rate path.

Markets currently price in a 60% probability that the Federal Reserve will raise interest rates at its policy meeting next week.

Meta shares jumped more than 6%, helping limit losses in the S&P 500, after the social media company launched a long-awaited artificial intelligence assistant capable of independently sending emails, selling a car or making travel bookings on behalf of users.

Alphabet shares fell 2.3% after Google’s parent company announced plans to invest at least $15.1 billion in artificial intelligence infrastructure in Finland over the next two years, including a major nuclear energy supply deal.

The Philadelphia Semiconductor Index rose 0.37%, with Advanced Micro Devices shares gaining 3%.