By Niket Nishant and Tharuniyaa Lakshmi
Sept 9 (Reuters) - The main U.S. stock indexes fell on Wednesday, when oil prices surged past the market-sensitive $100-a-barrel mark for the first time since July because of deepening Middle East tensions.
Traders have struggled to look past the seven-month-old U.S.-Iran war, which has heightened fears of a broader regional conflict.
Brent crude held above $100 a barrel after breaching the psychological threshold for the first time in more than six weeks following
Iran's claim that it fired ballistic missiles at a U.S. base in Jordan. There were reports of attacks on vessels from both sides, heightening concerns over oil supplies from the region. [O/R]
Energy was the only sector in the green on the S&P 500, advancing 1.7%.
"The big story of the day is oil prices, and they are taking the wind out of stocks. We've seen pockets of strength in the markets, but sentiment varies on a day-to-day basis," said Peter Cardillo, chief market economist at Spartan Capital Securities.
Markets now see a 60.2% chance interest rates will be increased by 25 basis points when the U.S. central bank meets next week, according to data from CME's FedWatch.
Meanwhile, chipmakers Arm Holdings
Investors are still gravitating to AI-related stocks, but concerns about circular deals have turned the mood cautious as companies at the heart of the AI boom start financing each other.
At 09:44 a.m. ET, the Dow Jones Industrial Average fell 357.08 points, or 0.68%, to 52,428.99, the S&P 500 shed 21.78 points, or 0.28%, to 7,651.74, and the Nasdaq Composite lost 91.46 points, or 0.35%, to 26,329.95.
INFLATION DATA, TREASURY ANNOUNCEMENT LOOM
Investors now await the U.S. Treasury's buyback announcement later in the session, weeks after the department said it would buy more longer-dated bonds to curb rising yields.
Such announcements typically feature a list of bonds eligible for buyback. However, "some market participants are looking to this announcement for some confirmation on the size Treasury will buy," J.P.Morgan analysts said in a note.
Any reaction in the bond markets could influence equities, which are typically pressured by elevated yields on risk-free government bonds.
The Consumer Price Index report scheduled for Friday and Producer Price Index data on Thursday will be in focus for clues on the U.S. Federal Reserve's interest-rate path.
"This week's CPI report is the most consequential data point before the Fed's September meeting, the last inflation reading policymakers will see before deciding on rates," Glenmede strategists wrote.
Separately, Meta was the biggest gainer on the S&P 500, up 5.5% after rolling out a long-touted AI assistant that can autonomously send emails, sell a car or book travel on behalf of a user.
Dow fell 1% after Bloomberg News reported the chemicals maker was considering exiting its $20 billion partnership with Saudi Aramco.
Declining issues outnumbered advancers by a 1.78-to-1 ratio on the NYSE and by a 1.78-to-1 ratio on the Nasdaq.
The S&P 500 posted six new 52-week highs and 15 new lows, while the Nasdaq Composite recorded 14 new highs and 58 new lows.
(Reporting by Niket Nishant and Tharuniyaa Lakshmi in Bengaluru; Editing by Joyjeet Das and Pooja Desai)
