Update: US Equity Indexes Retreat Amid Surging Treasury Yields, Higher Crude Oil Prices

12:36 PM EDT, 09/01/2026 (MT Newswires) -- (Updates with index/price moves and geopolitical news from the first paragraph.) US equity indexes declined amid rising crude oil prices and a surge in the benchmark government bond yield to the highest in about 18 months as Iran's geopolitics deteriorated. The Nasdaq Composite fell 0.8% to 26,158.1, the S&P 500 retreated 0.6% to 7,641.7, and the Dow Jones Industrial Average slid 0.7% to 52,821.3 after midday Tuesday. US Secretary of the Treasury Scott Bessent said the Iran blockade is "very powerful" and "we are going to economically asphyxiate this regime," Al Jazeera, a Middle Eastern broadcaster, reported. The US will announce new sanctions on "anyone that does business with the IRGC" while the US is "tracking down the IRGC's assets," Bessent was cited as saying. In a video message shared by Iranian news agencies, Iran's Parliament Speaker Mohammad Bagher Ghalibaf said the US's naval blockade against Iran amounts to a military act and that Tehran will respond militarily if it intensifies, according to Al Jazeera. If the US's "will is that we do not export oil" from the Gulf, Ghalibaf said, "no one will be able to export oil." The front-month US West Texas Intermediate crude oil contract advanced 3.8% to $89.05 per barrel, and global benchmark North Sea Brent climbed 3.1% to $93.28 per barrel. The probability of the Federal Reserve raising its target rate by 25 basis points to 3.75%-4.0% in September surged to 66% after midday Tuesday from 40% a day ago, according to the CME FedWatch tool. The likelihood of another increase of the same magnitude in October is almost a fifth, putting into perspective a 10% chance of the rates remaining at the current level by December. Most US Treasury yields rose. The 10-year yield rose three basis points to 4.79%, the highest level since January 2025, and the two-year advanced 3.5 basis points to 4.39%.