Major United States benchmarks ended lower on Thursday (Friday AEST) after producer price data for August and surging oil prices stoked concerns that the Federal Reserve could raise interest rates next week, while rising Treasury yields made stocks less attractive.
The Dow Jones Industrial Average fell 316.6 points, or 0.6%, to 52,064.1; the S&P 500 fell 44.7 points, or 0.6%, to 7,591.8; and the Nasdaq fell 171.6 points, or 0.7%, to 26,081.7.
Heavyweight chipmakers lost ground, with Nvidia down 2.3% and Micron Technology falling 4.7%, weighing on the S&P 500.
Apple rallied 3.6% a day after launching a $1,999 iPhone.
Macy's fell 4.7%. The struggling department-store operator raised its annual forecasts, but not by enough to impress investors.
American Eagle Outfitters dropped 14% to its lowest level since October after the apparel maker reiterated its annual comparable sales forecast amid choppy discretionary spending.
With supply routes through both the Strait of Hormuz and the Red Sea disrupted by the U.S.-Israeli war on Iran, Brent crude jumped 6% to US$107 a barrel, adding to inflation worries and fuelling expectations that the Fed will raise interest rates at its policy meeting on Wednesday.
Data on Thursday showed the U.S. producer price index (PPI) increased in line with expectations in August on a monthly basis, amid a rebound in the cost of energy products. Investors will pay close attention to Friday's August consumer price data.
Traders now see a 71.3% chance the Federal Reserve will raise interest rates by at least 25 basis points next week, up from about 64% before Thursday's report, according to the CME Group FedWatch Tool.
On the bond markets, yields on 10-year Treasury notes rose 2.4% to 4.961% - their highest in nearly three years - while two-year Treasury yields lifted 1.8% to 5.025%, reaching their highest in more than two years.
