U.S. stocks fell on Tuesday as rising oil prices and growing trade tensions between the U.S. and Canada put investors on the defensive. The Dow Jones Industrial Average dropped about 1.2%, while the S&P 500 declined 0.4% and the Nasdaq Composite slipped roughly 0.4% as Wall Street returned from the holiday weekend.
Oil emerged as the biggest pressure point, with Brent crude approaching $100 per barrel as Middle East tensions intensified. Investors were also digesting Canada’s new retaliatory tariffs while looking ahead to a crucial inflation report that could determine whether the Federal Reserve raises interest rates later this month.
Market Movers:
- Roivant Sciences (ROIV) +17%: Shares surged after subsidiary Pulmovant reported positive Phase 2 results for mosliciguat in patients with pulmonary hypertension associated with interstitial lung disease. The treatment met its primary endpoint while also improving walking distance and other secondary measures, supporting its ongoing Phase 3 development.
- D-Wave Quantum (QBTS) +10%: Shares rallied after the U.S. government announced a combined $300 million in CHIPS Act funding for D-Wave, Rigetti Computing and Quantinuum. The awards sparked a broader quantum rally, with Rigetti gaining 7%, Quantum Computing rising 6% and Quantinuum adding 3%.
- IonQ (IONQ) +8%: Shares climbed after IonQ raised its 2026 revenue outlook to $450 million-$460 million following its acquisition of SkyWater Technologies. The company also unveiled its new Superion 256 quantum platform, with customer deliveries expected next year.
- ZIM Integrated Shipping (ZIM) +5%: Shares gained as Hapag-Lloyd and FIMI moved to revise their proposed $4.2 billion acquisition following discussions with Israeli officials. The takeover has faced significant opposition in Israel over concerns about transferring control of strategic shipping operations to a foreign company.
- Intel (INTC) +5%: Shares rose after Northland Securities upgraded Intel to Outperform, citing progress in its turnaround and potential benefits from its Tesla Terafab partnership. Separate reports that Intel could raise CPU prices by as much as 10% provided another catalyst for the stock.
- ASML (ASML) +3%: Shares advanced as Samsung, TSMC and Intel move toward adopting ASML’s latest High-NA EUV equipment. ASML is also working with customers on larger photomasks that could eventually increase High-NA machine throughput by as much as 40%.
- Novartis (NVS) -13%: Shares tumbled after a late-stage study of muscle-wasting drug candidate del-desiran failed to meet its primary endpoint, marking the company’s third clinical trial disappointment in a week. The setback also pressured other biotech names, although Novartis maintained its longer-term sales growth guidance.
- Amgen (AMGN) -8%: Shares fell despite positive Phase 3 results for IMDELLTRA combined with AstraZeneca’s Imfinzi in extensive-stage small cell lung cancer. The study showed a significant overall-survival benefit with no unexpected safety signals, but that was not enough to prevent selling pressure Tuesday.
Oil Nears $100 as Middle East Tensions Escalate
Oil prices jumped Tuesday again, with Brent crude trading near $98.50 after briefly topping $99 and WTI climbing toward $94. The latest move followed reports that Saudi Arabia halted operations at energy facilities in its southern region after attacks claimed by Houthi forces.
The surge is reviving inflation concerns at an especially difficult moment for the Fed. Friday’s stronger-than-expected jobs report already increased expectations for another rate hike, making higher energy prices an additional complication.
U.S.-Canada Trade War Adds Another Risk
Trade tensions also intensified after Canada imposed retaliatory tariffs of up to 50% on roughly $20 billion worth of U.S. imports. The measures target products including dairy, steel, wood and other goods after negotiations between the two countries broke down. The escalation creates another potential source of inflation while raising uncertainty for companies with significant cross-border supply chains.
Inflation Data Moves Into Focus
Investors are now turning their attention to Friday’s Consumer Price Index report. After the U.S. added 162,000 jobs in August, another hot inflation reading could strengthen the argument for the Fed to raise rates at its September meeting. Corporate earnings remain another catalyst, with Oracle set to deliver one of the week’s most closely watched reports as investors look for further evidence on the strength of AI and cloud spending.
Looking Ahead
Wall Street enters the rest of the week facing an increasingly difficult combination of rising oil prices, renewed trade tensions and uncertainty surrounding interest rates. Friday’s CPI report could determine whether the recent inflation concerns are enough to push the Fed toward another hike. Until then, oil may remain the market’s biggest wildcard. A sustained move above $100 per barrel could intensify inflation fears and pressure stocks further, while any easing of Middle East tensions could provide investors with some much-needed relief.