(Updates with market moves at the end of the day, and other changes, if any.)
US stocks dropped for a second consecutive session on Tuesday as traders fretted over surging bond yields and oil prices while bracing for an interest rate hike from the Federal Reserve.
The Nasdaq Composite shed 0.8% to close at 25,981.57, while the Dow Jones Industrial Average fell 0.6% to 52,093.11. The S&P 500 dipped 0.5% to 7,585.73. Except energy and materials, all sectors ended in the red, led by consumer discretionary.
The Federal Open Market Committee began its two-day policy meeting on Tuesday.
Markets are now pricing in a 95% probability that the FOMC will hike its benchmark lending rate by 25 basis points, according to the CME FedWatch tool.
Goldman Sachs said the Fed will likely avoid disappointing markets.
Treasury yields were higher, with the 10-year yield up 4.3 basis points at 5.004%. It hit 5.041% earlier in the day, the highest since July 2007, CNBC reported. The two-year yield advanced 3.7 basis points to about 4.7%.
West Texas Intermediate crude oil jumped 4.4% to $105.81 a barrel in Tuesday late-afternoon trade, while Brent climbed 2.8% to $108.63.
Crude loadings at Saudi Arabia's Red Sea export terminal in Yanbu had been halted, Reuters reported Tuesday, citing shipping industry sources. Saudi Arabia -- which is the world's biggest oil exporting nation -- has notified European customers of its decision to cancel some crude cargoes scheduled for late-September delivery, according to the news agency.
Separately, Libya halted operations at three oil fields, though the issue was not related to the US-Iran conflict, Reuters reported.
These developments come as Saudi's key East-West crude oil pipeline remained shut following recent attacks by Yemen's Iran-aligned Houthis.
"The East-West pipeline is expected to remain out of service for several weeks, and without a pickup in flows through the Strait of Hormuz, its closure will further exacerbate an already tight global supply situation," Saxo Bank said Tuesday in a report.
In company news, Axon Enterprise (AXON) shares tumbled 9.8%, the second-worst performer on the S&P 500. The company said it intends to offer $1 billion of 0% convertible senior notes due 2031 in a public offering.
Salesforce (CRM) is expanding its partnerships with Nvidia (NVDA), Alphabet's (GOOG, GOOGL) Google Cloud, and Amazon.com's (AMZN) Amazon Web Services to strengthen its agentic enterprise capabilities and expand its artificial intelligence footprint across third-party infrastructure.
Shares of Salesforce fell 1.5%. Alphabet and Amazon also dropped, while Nvidia edged higher.
Spot gold edged down 0.1% to $4,296.37 per troy ounce, while silver rose 0.1% to $64.20 per ounce.
