Update: US Equity Indexes Drop as Fresh Military Strikes on Iran Send Crude Oil Sharply Higher

03:52 PM EDT, 09/01/2026 (MT Newswires) -- (Updates with index/price moves and geopolitical news from the first paragraph.) US equity indexes fell amid soaring crude oil prices and a surge in the benchmark government bond yield to the highest in about 18 months as Iran vowed to inflict severe damage following Washington's strikes on targets in the Islamic Republic on Tuesday afternoon. The Nasdaq Composite fell 1.1% to 26,095.2, the S&P 500 retreated 0.78% to 7,628.3, and the Dow Jones Industrial Average slid 0.8% to 52,761.5 ahead of the market close. US forces began striking Islamic Revolutionary Guard Corps targets in Iran, the US Central Command said in a message on X, formerly Twitter. The strikes follow recent attempted attacks by the IRGC against commercial shipping in the Strait of Hormuz and against American service members deployed to the region. These new hostilities come as the duo traded attacks overnight into Monday, the first exchange after more than a month. Iranian media reported explosions in Bandar Abbas, Qeshm Island, Konarak, Chabahar, Jask, Sirik and Lavan, Al Jazeera, a Middle Eastern broadcaster, reported. Iran's army and the Iran Revolutionary Guards Corps promised the US would regret and face "severe punishment" for the aggression, the news report said. The front-month US West Texas Intermediate crude oil contract surged 5.6% to $90.57 per barrel, and global benchmark North Sea Brent soared 5.1% to $95.14 per barrel. Most US Treasury yields rose. The 10-year yield jumped 3.8 basis points to 4.8%, the highest since January 2025, and the two-year advanced 4.8 basis points to 4.4%. In economic news, US job openings rose to 7.271 million in July, according to the Bureau of Labor Statistics, below the 7.313 million openings expected in a survey compiled by Bloomberg, but up from the 7.182 million openings reported in June. The July level represents 4.4% of total employment, up from 4.3% in June and 4.3% a year earlier. 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.