Stock market news for Aug. 31, 2026

Stocks fell on Monday after the U.S. and Iran traded fire for the first time in a month, though the major averages still closed out August with gains.

The S&P 500 slipped 0.33% to 7,686.14, while the Nasdaq Composite shed 0.12% to close at 26,370.89. The Dow Jones Industrial Average slid 374.09 points, or 0.7%, lower, to end at 53,185.90. The 30-stock index was dragged down by losses in Goldman Sachs and Alphabet.

On Sunday, U.S. Central Command confirmed to MS NOW that the U.S. struck two rocket launchers on Iran’s Larak Island.

Sunday’s attack was the first publicly acknowledged U.S. strike on Iranian positions since late July, with Iranian state media reporting that Tehran had attacked U.S. bases in Jordan in retaliation.

Oil prices jumped after the hostilities resumed. U.S. West Texas Intermediate oil settled up 2.83% at $85.76 per barrel. Global benchmark Brent crude oil futures were up 2.71% to settle at $90.49 a barrel.

Longer-dated Treasury yields rose alongside oil prices Monday, adding to the downbeat sentiment in equities.

While Tom Hainlin of U.S. Bank Asset Management noted that oil’s current levels are “a little high,” the latest advance shouldn’t be significantly damaging.

“The world’s got enough oil for what it needs, and $80 to $90 is not so restrictive that it collapses the economy,” the firm’s national investment strategist said. “Today’s indication just puts us at the high end of that range, but it doesn’t change our outlook for the consumer, for business, for AI, manufacturing reshoring or continued electrification of the economy.”

If oil climbs above $100 a barrel, then that may start to get “pretty prohibitive,” he added.

Heightened tensions in the Middle East have contributed to choppy trading in August, but Wall Street posted a month of broad gains, led by the tech sector.

The Dow gained more than 1% month to date for its fifth consecutive monthly advance. It was also the blue-chip index’s 15th positive month in the past 16. The S&P 500 and Nasdaq recorded their first one-month increases since May, up 2.6% and 3.9%, respectively. Both the S&P 500 and Dow also reached all-time highs earlier in August.

Tech supported the charge in the month, with artificial intelligence-linked stocks outperforming. The S&P 500 tech sector finished up more than 6% for the month. Nvidia climbed about 10%, while Microsoft gained more than 9%. Micron Technology advanced more than 16%.

To be sure, August has still been a turbulent month, as inflation fears sent Treasury yields to multi-year highs. The Treasury Department tried to stem the rout by saying it would increase debt repurchases, but yields along the long end of the curve remain elevated. Federal Reserve Chairman Kevin Warsh also said Friday he’s worried about inflation, noting that, “while this summer’s [inflation] readings were better than expected, they do not tell me that underlying trends have meaningfully improved.”

Investors will get more insight into the state of the economy this week, with the August jobs report due Friday morning. Monthly manufacturing and services sector data is also on deck.

Traders will also be watching for developments out of Asheville, N.C., where a meeting of the Group of 20 finance ministers is taking place.