Oil Rises, Stocks Fall on Iran Strikes 08/31 09:42

   The price of oil rose and stocks fell on Wall Street Monday after the U.S. 
launched its first military action in a month against Iran.

   NEW YORK (AP) -- The price of oil rose and stocks fell on Wall Street Monday 
after the U.S. launched its first military action in a month against Iran.

   The S&P 500 index fell 0.4%. The Dow Jones Industrial Average fell 348 
points, or 0.7%, as of 9:51 a.m. Eastern time. The Nasdaq fell 0.3%.

   The losses were broad, with nearly every sector within the benchmark S&P 500 
losing ground. Energy stocks, though broadly gained ground. Exxon Mobil rose 
2.9% and Chevron rose 3%.

   Markets were mixed in Europe and Asia.

   GameStop jumped 4.2% after the video game retailer provided a preliminary 
second-quarter earnings outlook above its year-ago results. Shares of Aon fell 
5.8% as the company announced that it was buying insurance broker USI Insurance 
Services from private equity firm KKR in a deal valued at $17 billion, 
including debt.

   U.S. forces struck Iranian rocket launchers on the Strait of Hormuz on 
Sunday. Meanwhile, the United Arab Emirates said it intercepted an Iranian 
drone over its waters on Monday. The aggressive actions follow a lull in 
activity in the U.S. war with Iran, which has lasted more than six months.

   The war has curtailed traffic in the Strait of Hormuz, which accounts for 
about 20% of the world's oil shipments. Oil prices remain high after an initial 
surge earlier in the war and that has made everything from gasoline to shipped 
goods more expensive.

   The price of Brent crude, the international standard, rose 3.2%, to $90.91 
per barrel on Monday. The price swung between $72 and $102 last month amid 
rising and falling hopes for a deal to end the war.

   The national average for gasoline in August has been above $4 per gallon 
every day in August for the first time ever, according to the AAA. It has been 
the most expensive August at the pump on record, outpacing even the enormous 
supply chain crunch during the COVID-19 pandemic in August 2022.

   Higher energy prices because of the war have fueled already stubbornly high 
inflation. That has been weighing on household spending and consumer 
confidence. It has also given the Federal Reserve a more complicated path ahead 
for its interest rate policy.

   The rate of inflation remains well above 3%, which is far beyond the Fed's 
2% target. Wall Street expects the central bank to raise interest rates at 
least once before the year ends in an effort to cool inflation.

   The yield on the two-year Treasury, which closely tracks expectations about 
Fed moves, remained at 4.34% from late Friday. That's up significantly, though, 
from about 3.50% at the beginning of 2026.

   The yield on the 10-year Treasury rose to 4.76% from 4.73% late Friday. 
That's back up around the level seen two weeks ago when the Trump 
administration took the unusual step of announcing it would intervene in the 
bond market.

   The job market remains resilient, but is showing signs of weakening. Any 
increase to interest rates that could cool inflation also risks hurting the 
jobs market.

   Later this week, the U.S. reports August jobs data. In July, the U.S. job 
market stalled unexpectedly as employers cut 23,000 jobs. Labor Department 
revisions slashed another 103,000 jobs from May and June payrolls.