US stocks fell for a third straight session on Wednesday as rising oil prices and Treasury yields added to investor concerns over inflation and the Federal Reserve’s interest-rate path.
The Dow Jones Industrial Average dropped 405.41 points, or 0.77%, to 52,380.66.
The S&P 500 fell 0.48% to 7,636.36, while the Nasdaq Composite declined 0.64% to 26,253.34.
Treasury yields climb after debt buyback announcement
Treasury yields rose after the US Treasury Department said it would buy back up to $6 billion of longer-dated government debt, tripling the size of its normal operation.
The announcement followed a decision last month to at least double the level of government debt buybacks.
The benchmark 10-year Treasury yield climbed to 4.857%, its highest level since November 2023. The yield had briefly moved above 4.8% on Tuesday as higher oil prices intensified inflation concerns.
The rise in yields came despite the larger buyback plan, with some investors having expected an even bigger operation.
Analysts cited expectations for purchases of as much as $7 billion to $8 billion, while some estimates had been as high as $8 billion to $10 billion.
Higher yields on government bonds can make equities less attractive by increasing the return available from relatively low-risk assets.
The market is also awaiting key inflation data later this week.
The Producer Price Index is due Thursday, followed by the Consumer Price Index on Friday. Traders are pricing in a roughly 60% chance that the Federal Reserve will raise interest rates at its meeting next week.
Oil rises above $100 as Middle East tensions escalate
Oil prices added to the pressure on stocks as concerns over disruptions to Middle East energy supplies intensified amid rising tensions between the US and Iran.
Brent crude futures settled 3.36% higher at $101.21 a barrel, while West Texas Intermediate futures gained 3.25% to $96.05. Both benchmarks recorded their highest settlements since May.
The latest gains extend oil’s advance from Tuesday, when higher crude prices also weighed on US equities.
Concerns over global oil supplies have increased as the conflict involving the US, Israel and Iran enters its seventh month, raising fears of a broader regional escalation.
The S&P 500 energy sector was the only sector index to rise on Wednesday, while the other sector indexes declined.
Meta gains while Alphabet and Dow fall
Some individual stocks moved against the broader market trend. Meta shares rose after the social media company launched an AI assistant capable of carrying out tasks such as sending emails, selling a car and making travel bookings.
Alphabet shares declined after the Google parent announced plans to invest at least $15.1 billion in AI infrastructure in Finland over the next two years, including a major nuclear power supply agreement.
The Philadelphia Semiconductor Index also gained, with Advanced Micro Devices among the stocks advancing.
Shares of Dow fell after a Bloomberg News report said the chemicals company was considering exiting its $20 billion partnership with Saudi Aramco.
The S&P 500 ended about 2% below its Aug. 13 record close but remained roughly 12% higher for 2026.
With oil prices above $100 and Treasury yields near their highest levels in almost three years, investors are now focused on inflation data for signals about the Fed’s next move.