Dow drops 600 points to start shortened week as oil prices climb

Stocks dropped Tuesday to kick off a shortened week of trading, with investors monitoring escalating tensions in the Middle East ahead of a key inflation reading later this week.

The Dow Jones Industrial Average tumbled 622 points, or 1.2%. The S&P 500 was down by 0.4%, while the Nasdaq Composite dipped 0.2%. U.S. markets were closed Monday for the Labor Day holiday.

Stocks came under pressure as oil prices continued to rise. West Texas Intermediate futures climbed for a sixth straight day — its longest rally since a seven-day streak back in March — after the U.S. and Iran exchanged blows over the weekend. Brent crude oil futures last hovered around $98 per barrel.

The spike in energy prices sharpens investors' focus on inflation data set to release later this week, as they will likely shape expectations for monetary policy ahead of the Federal Reserve's meeting next week. The producer price index and consumer price index for August are due out Thursday and Friday, respectively.