Wall Street Falls on Oil Surge Tied to Strait of Hormuz Fighting but Posts August Gains

U.S. stocks closed lower on Monday, August 31, as crude oil prices surged following fresh fighting in the Strait of Hormuz that raised fears of supply disruptions and renewed inflationary pressure. The U.S. military struck Iranian rocket launchers that were preparing to send mines into the waterway on Sunday, according to U.S. Central Command spokesperson Captain Tim Hawkins, ending weeks of relative calm and pushing Brent crude for November above $90 a barrel while West Texas Intermediate approached $86.

The rise in oil prices stoked concerns that the Federal Reserve could be pushed toward higher interest rates, lifting 10-year Treasury yields to their highest level since January 2025. Stocks trimmed losses in the latter part of the session but all three major indexes still finished in the red, extending a pullback that began Friday.

Despite the single-day selling, all three indexes closed out August with solid monthly gains. The S&P 500 rose 2.6% for the month and the Nasdaq Composite gained 3.9%, with both recording their first monthly advance since May. The Dow Jones Industrial Average added more than 1% in August, marking its fifth consecutive monthly gain and its 15th positive month in 16. Technology stocks led the charge, with the S&P 500 tech sector finishing August up more than 6% and Nvidia climbing roughly 10% for the month. Both the S&P 500 and Dow also set all-time highs earlier in August.