Stock market today: Dow, S&P 500, Nasdaq fall as oil prices rise, US-Canada trade war escalates

Primary Journalistic Dispatch & Direct Reporting

US stocks slid on Tuesday as the US and Canada's trade war escalated and rising oil prices and inflation jitters took focus at the start of the holiday-shortened week.

The Dow Jones Industrial Average ( ^DJI ) fell 1.1%, while the S&P 500 ( ^GSPC ) slipped roughly 0.5%. The tech-heavy Nasdaq Composite ( ^IXIC ) fell 0.3% as investors eyed inflation data and Oracle earnings later this week.

Rising oil prices put pressure on markets as Iran said it was close to a deal with Oman to manage traffic through the Strait of Hormuz. Brent crude oil futures ( BZ=F ), the global benchmark, crept toward $100 per barrel , while US benchmark WTI crude ( CL=F ) traded above $93 per barrel.

In-Depth Developments & Factual Context

Fears of an ongoing war in the Middle East have revived angst about inflation and a potential Federal Reserve rate hike this month, particularly after Friday's blowout jobs report showed strong job gains in August. Investors are bracing for a fresh Consumer Price Index reading on Friday, which will indicate whether inflation is moving back down toward the Fed's 2% goal or whether it remains a thorn in the central bank's - and consumers' - side.

Adding to market uncertainty, Canada imposed tariffs of up to 50% on some US goods on Tuesday, escalating the trade spat between the two neighboring countries. The like-for-like tariffs affect approximately $20 billion in US goods and target dairy, steel, and wood products, among others.

On the earnings calendar, Oracle ( ORCL ) earnings are the highlight this week. But first, GameStop ( GME ) reports on Tuesday.

Industry Impact & Strategic Analysis

Stocks slipped on Tuesday to kick off a shortened trading week as rising oil prices sparked further investor worries about a possible Fed rate hike.

The S&P 500 ( ^GSPC ) dropped 0.5% while the Dow Jones Industrial Average ( ^DJI ) fell about 1.1%. The tech-heavy Nasdaq Composite ( ^IXIC ) dropped about 0.3% as some semiconductor names offset weakness elsewhere in the market.

Continued strikes in the Middle East sent West Texas Intermediate above $93 per barrel, while Brent hovered above $98 per barrel. Investors increasingly bet that the Fed will need to raise rates at its policy meeting next week. A Consumer Price Index report later this week could help sway policymakers one way or the other.

Forward Outlook & Market Perspective

Intel ( INTC ) shares jumped 9% on a report that the chipmaker plans to raise prices. Oracle ( ORCL ) shares also gained ahead of the cloud and software giant's earnings report later this week.

Copper prices ( HG=F ) hit new highs on Tuesday as investors anticipated near-term supply tightenings and escalating tariffs.

Futures on the Comex exchange in New York traded near $6.85 a pound, while copper on the London Metal Exchange touched $14,617 a metric ton to hit a second intraday record in a row.

Copper prices are up roughly 21% year to date. Copper Miners ETF ( COPX ) has also rallied 32% during the same period, according to Yahoo Finance's AlphaSpace data.

Worries over escalating tariffs in the US have prompted buyers to import vast amounts of copper, leaving trading hubs abroad with low inventories.

"Copper has been flowing toward the United States for the best part of a year, and the market has watched it being drawn steadily out of every other location," Neil Welsh, head of metals at Britannia Global Markets, told Yahoo Finance. "There isn't exactly a shortage of metal, it is just concentrated in one place."

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