NEW YORK — U.S. stocks are drifting lower Tuesday in their return to trading from a three-day weekend.
The S&P 500 fell 0.4%. The Dow Jones Industrial Average was down 517 points, or 1%, as of 2 p.m. Eastern time, and the Nasdaq composite was 0.2% lower.
They felt pressure from oil prices, after a barrel of Brent crude briefly climbed as high as $99.46. It later gave back most of its gain and was most recently up 0.1% at $97.05. It's nevertheless jumped from roughly $72 since early July as increased fighting in the Middle East keeps the global flow of oil constricted.
More expensive oil has worsened worries about the high inflation weighing on people and companies across the country, which gives extra heft to a couple reports coming later this week. On Thursday, the U.S. government will release its August report for inflation at the wholesale level, which economists expect will show an acceleration to 5.4% from 4.7% in July.
The more closely watched report on inflation that U.S. consumers are feeling will arrive on Friday. That update will show how much more people are paying for groceries, clothes and other costs of living, and economists expect it eased a bit to 3.3% from July’s 3.4% inflation rate. That, though, remains well above the 2% target that the Federal Reserve has set as its goal.
This week's updates on inflation will be the last before the Fed meets next week to decide whether to cut, raise or hold interest rates steady. The traditional move for the Fed when inflation is high is to raise its main interest rate. That in turn would filter out into the rest of the bond market, make it more expensive for companies and people to borrow, slow the overall economy, undercut prices for investments and hopefully rein in inflation.
But President Donald Trump has been lobbying for lower interest rates instead, which could give the economy — and inflation — an extra kick. The Fed’s new chairman, Kevin Warsh, has meanwhile said he wants to give financial markets fewer clues about what the Fed plans to do with interest rates in the short term.
That all has traders betting on a 60% probability the Fed will raise its federal funds rate at the conclusion of its next meeting on Sept. 16, according to data from CME Group.
In the bond market, the yield on the 10-year Treasury inched up to 4.79% from 4.78% and remains near its highest level since the autumn of 2023.
Higher Treasury yields put more pressure on companies to grow their profits in order to lift their stock prices.
On Wall Street, Boston Scientific fell 4.6% after saying that a network outage earlier this summer caused by a cybersecurity incident means that it's unlikely to meet forecasts it gave for sales and profit for the third quarter and for the fully year of 2026. It expects to make back some of the revenue as it continues to ramp operations globally, fulfill customer orders and reduce remaining backlogs, but it doesn't yet know the full impacts.
Shares of Novartis that trade in the United States tumbled 13.9% after the Swiss pharmaceutical company gave a discouraging update on a study of a therapy for people living with myotonic dystrophy type 1, a neuromuscular disease.
Qualcomm helped limit the market's losses after rising 2.9%. It announced a deal to collaborate with Amazon on large-scale AI data centers. The deal also gives Amazon the right to acquire up to 25 million of Qualcomm's shares at $161.26 per share.
In stock markets abroad, Japan’s Nikkei 225 sank 1.7% under the weight of losses for major exporters, which were hurt by more rises for the value of the Japanese yen against the U.S. dollar.
A stronger yen erodes the value of sales made in U.S. dollars when Toyota Motor, Panasonic Holdings and other Japanese exporters have to translate them back into yen. The Bank of Japan is also scheduled to meet next week on interest rates, and speculation is climbing that it could raise rates.
In China, indexes fell 0.4% in Hong Kong and rose 0.2% in Shanghai after the world's second-largest economy said its exports jumped 25% year-on-year in August, driven by strong demand for autos and high tech items.
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AP Business Writers Matt Ott, Elaine Kurtenbach, Chan Ho-him and Yuri Kageyama contributed to this report.
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