Stocks fall to start September as traders look to yields, rising oil prices

Stocks fell on Tuesday, the first day of September, as inflation worries and elevated oil prices lifted bond yields in the U.S. and abroad, raising concern about whether the Federal Reserve will tighten monetary policy later this month.

The S&P 500 shed 0.3%, while the Nasdaq Composite pulled back 0.5%. The Dow Jones Industrial Average shed 221 points, or 0.4%.

Global bond yields continued their march higher. The U.S. 10-year Treasury note yield scaled to levels not seen since January 2025. Japan’s 10-year yield reached its highest level since August 1996, while Germany’s benchmark yield rose to a 2011 high.

However, stocks later came off their lows as the upward pressure in yields eased.

Yields around the world have been rising recently as traders worry that persistently higher oil prices may drive inflation and impact the Fed’s interest rate path. The central bank is slated to meet next in two weeks. On top of that, September has been a historically bad month for stocks.

“The market is exhibiting signs of nervousness across myriad of indicators,” traders at Goldman Sachs wrote, pointing to new American Association of Individual Investors Sentiment Survey data. “This attitude toward risk is not just theoretical, investors are quite literally putting their money where their mouth is in terms of portfolio risk allocations.”