US stocks fell for a second straight session Tuesday as oil prices surged and…

US stocks fell for a second straight session Tuesday as oil prices surged and Treasury yields hit their highest level since 2007. The Dow Jones Industrial Average dropped 328 points (0.63%) to close at 52,093, the S&P 500 slid 0.45% to 7,586, and the Nasdaq Composite fell 0.78% to 25,982. Oil climbed after Saudi Arabia shut a key pipeline and Yemen's Houthi forces seized a strategic point along a major shipping route amid the widening Middle East conflict; Brent crude, the international oil benchmark, has jumped about 20% this month to above $105 a barrel. That pushed the 10-year Treasury yield, the interest rate on a benchmark US government bond that influences mortgage and loan rates, as high as 5.04%, since investors demand more return for lending when inflation risks rise. The moves come just before the Federal Reserve's interest-rate decision, expected Wednesday afternoon US time; futures markets now price in a more than 90% chance of a quarter-point hike from the current 3.5%-3.75% range, partly because Fed Chair Kevin Warsh struck a hawkish tone in a late-August speech. Tech and AI-linked stocks led the declines for a second day, with chip and AI-infrastructure names Oracle, Micron, Lam Research, and CoreWeave each falling more than 4%, as investors grew warier about the pace of AI spending.

The Philippine Stock Exchange Index (PSEi) fell 1.11%, or 67.29 points, to close at 6,007.78 on Tuesday, back near the 6,000 level, as rising global oil prices, a weakening peso, and climbing bond yields fed inflation worries. The peso has hit a fresh record low against the US dollar in six of September's trading sessions so far, closing Monday at ₱62.86, within 14 centavos of the closely watched ₱63 mark, as expectations of a US interest-rate hike boosted demand for dollars. Trading was subdued Tuesday, with net value turnover of only ₱4.91 billion. Nearly every sector fell, led by services stocks, down 2.55%; property was the lone gainer, up 0.17%. Among individual stocks, International Container Terminal Services, the country's largest port operator, dropped 3.23% to lead the index's decliners. The pressure builds on a concern that's been mounting for weeks: the Bangko Sentral ng Pilipinas (BSP), the country's central bank, raised its benchmark interest rate to 5% in late August to fight inflation, which eased slightly to 6.1% in August but remains well above the BSP's 2%-4% target. Rising oil prices and a weaker peso both push import costs higher, threatening to reverse that progress.

With the Federal Reserve's rate decision due Wednesday afternoon US time, the same forces rattling Wall Street are hitting the Philippines even harder. Futures markets now price in a more than 90% chance the Fed will raise its benchmark rate by a quarter point, largely because Fed Chair Kevin Warsh signaled openness to tighter policy in a late-August speech; a hike would widen the gap between US and Philippine interest rates, making it harder for the BSP to hold its own rate steady without weakening the peso further. Oil is the other shared thread: the same Middle East-driven price surge hitting Wall Street through higher borrowing costs is a direct hit to the Philippines, which imports nearly all its oil, raising transport, electricity, and food costs. The peso, already at repeated record lows this month, would likely weaken further if the Fed hikes as expected, since higher US rates typically draw investment away from emerging-market currencies like the peso. For overseas Filipino workers, a weaker peso means more pesos for every dollar sent home, a rare upside, even as it raises the cost of living and complicates the BSP's fight against inflation.