Dow Jones Industrial Average is paying for a sixth day of Crude Oil

The Dow Jones Industrial Average traded near 52,900 on the first session since Friday, roughly 190 points lower. Crude Oil has surged for six consecutive days, and the two-year Treasury yield reached its highest level since January 2025. These two factors influenced the discount rate for the index. Crude Oil, both West Texas Intermediate (WTI) and Brent, climbed for six days, with Brent trading near $98.00.

The U.S. and Iran exchanged military actions, resulting in the sinking of one Iranian tanker and Houthi attacks on Saudi Aramco facilities in Abha, Najran, and Jazan, causing injuries to over 70 people. The Strait of Hormuz is currently blocked, prompting Saudi Arabia to reroute most of its oil exports through the Red Sea. Tanker traffic through the strait is significantly lower than usual, while refining capacity is constrained due to the war.

American diesel prices reached a record high of over $5.90 per gallon. The two-year Treasury yield is currently at its highest since January 2025, while the 10-year yield sits above 4.80%. Oil prices have driven the discount rate for this index, while higher yields increase the funding costs for financial and consumer credit names, which make up more than a quarter of the index's weight.

In response to the escalating conflict, Canada imposed retaliatory tariffs on approximately $20 billion worth of American goods, with rates ranging from 15% to 50%. The Producer Price Index (PPI) is scheduled to be released on September 10 at 12:30 GMT, with the headline expected to remain at 5.3% YoY and the core measure at 4.6%.

The Consumer Price Index (CPI) will be released on September 11 at the same hour, with the headline inflation rate anticipated to hold at 3.4% and the core measure at 2.4%.