Dow drops 300 points as a hike looks certain

Good morning. The Dow finished last night about 300 points lower. The 10-year Treasury yield pushed past 5% for the first time since 2007, and oil is hanging around $100 a barrel, which makes stocks look pricey. By one count, the first ten trading days of September were the worst start since 2008.

The rate jump traces back to worries over Middle East oil. After a drone strike shut Saudi Arabia's East-West pipeline, Houthi rebels threatened to cut off exports through the Red Sea, and WTI jumped 4%. Energy Secretary Chris Wright called it a short outage that should end within days, but traders aren't convinced.

The Fed will make its call against that backdrop. Swaps price better than a 90% chance of a quarter-point hike. What really worries investors is not one hike but the path the dot plot could show for more, with some saying the Fed must show resolve now and others warning that one hike is fine but several would be a mistake.

In crypto, the Clarity Act stalled in a Senate procedural vote after Democrats raised questions about the Trump family's crypto interests, and Bitcoin slipped late in the session.