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Wall Street closed out August on a downbeat note Monday as stocks fell and the price of oil rose after the U.S. launched its first military action in a month against Iran.
The S&P 500 index fell 0.3%. The Dow Jones Industrial Average dropped 0.7% and the Nasdaq composite slipped 0.1%.
August had no shortage of turbulence for the market, but the S&P 500 and Nasdaq each posted a gain for the month after losing ground in July and June. The Dow, meanwhile, managed its fifth-straight monthly gain.
Monday's losses were broad, with nearly every sector within the benchmark S&P 500 finishing in the red. Energy stocks, though, notched gains. Exxon Mobil rose 2.7% and Chevron rose 2.1%.
On the losing side, Edison International slumped 23.1% and PG&E fell 20.1% for the two steepest declines. That followed reports about potential California wildfire legislation that would allow insurers to sue utilities over related claims.
Amazon fell 2.5% after The Wall Street Journal reported that the Federal Trade Commission and more than 20 states are preparing to sue the online retail giant over claims the company manipulated prices on its platform.
The U.S. war with Iran remained a key focus for Wall Street. U.S. forces struck Iranian rocket launchers on the Strait of Hormuz on Sunday. Meanwhile, the United Arab Emirates said it intercepted an Iranian drone over its waters on Monday.
The aggressive actions follow a lull in activity in the U.S. war with Iran, which has lasted more than six months.
The war has curtailed traffic in the Strait of Hormuz, which accounts for about 20% of the world's oil shipments. Oil prices remain high after an initial surge earlier in the war and that has made everything from gasoline to shipped goods more expensive.
The price of Brent crude, the international standard, rose 2.7% to settle at $90.49 per barrel on Monday. Brent fell below $80 earlier in August but has since moved higher with no sign of an imminent end to the war.
The national average for gasoline in August has been above $4 per gallon every day of the month for the first time ever, according to the AAA. It has been the most expensive August at the pump on record, outpacing even the enormous supply chain crunch during the COVID-19 pandemic in 2022.
Higher energy prices have fueled already stubbornly high inflation. That has been weighing on household spending and consumer confidence. It has also given the Federal Reserve a more complicated path ahead for its interest rate policy.
The rate of inflation remains well above 3%, which is far beyond the Fed's 2% target. Wall Street expects the central bank to raise interest rates at least once before the year ends in an effort to cool inflation. On Friday, Fed Chair Kevin Warsh said that inflation is still too high and suggested a rate hike might be necessary in the coming months.