U.S. stocks fell ahead of the Federal Reserve's rate decision as Treasury yields hit more multiyear highs amid signs of a prolonged oil shock.

The Dow Jones Industrial Average dropped 328.09 points, or 0.63%, to 52093.11. The S&P 500 lost 34.25 points, or 0.45%, to 7585.73 and the tech-heavy Nasdaq Composite fell 204.84 points, or 0.78%, to 25981.57.

Oil futures surged $4.44, or 4.4% to $105.83 a barrel as concerns mounted about the ability of one of the world's largest exporters, Saudi Arabia, to get its crude to market. Alerts sounded across the country Tuesday as Houthi rebels stepped up attacks that threaten sea and pipeline routes that are an alternative to the Strait of Hormuz, Reuters reported. At a recent event in Houston, Chevron Chief Executive Mike Wirth warned that strategic reserves and other buffers that cushioned the effect of the Iran war in its early stages were now wearing thin.

The oil supply crisis has driven up inflation expectations and long-term Treasury yields.

The yield on the 10-year Treasury note rose 0.035 percentage point to 4.995%, the highest close since July 20, 2007. The yield on the policy-sensitive two-year note rose 0.028 percentage point to 4.661%. The yield on the 30-year bond rose 0.036 percentage point to 5.362%.

A "disorderly rise in bond yields" is now the biggest macroeconomic risk keeping institutional investors up at night, according to a monthly survey from Bank of America Global Research. The disorderly rise in yields threatens to drive up mortgage rates further and slow down credit activity across the economy.

Traders are planning on Federal Reserve Chairman Kevin Warsh raising rates to a range between 3.75% and 4% on Wednesday, and the dollar rose against rivals as traders awaited Fed action.

Rate-sensitive gold futures fell 0.4% to $4291.60 a troy ounce, and are on the edge of bear-market territory after sliding 19% from their January highs.

A rebound in artificial-intelligence stocks was muted as traders weighed statements from AI firms about slowing development. The PHLX "SOX" Semiconductor Sector index rose 0.4%, but is still own more than 20% in the last three months, according to Dow Jones Market Data. Global semiconductor stocks were identified in the BofA fund-manager survey as the "most crowded trade."

"Investor conviction on [the] macro boom and fast-paced AI capex [is] still strong," BofA strategists said in a research note reviewing the survey results.

Airlines and cruise ship operators continued their retreat. The average price of a gallon of gasoline hit $4.33 in the U.S., within 25 cents of 2026 highs, according to the AAA driving association.

One estimate of restaurant traffic hinted that rising gasoline and credit costs were already impeding discretionary spending. Monthly visits to U.S. restaurants declined 2.4% compared with last August, according to a report from data-analytics firm Placer.AI. Shares of Wingstop, Cava, Cheesecake Factory, Shake Shack and Chili's owner Brinker International all slid by 4% or more.

Truist Financial struck a deal to sell $5.5 billion of auto loans as part of the Charlotte, N.C. financial services firm's decision to exit the near-prime auto lending business.

Federal regulars pressed Tesla on whether its steering wheel-free Cybercab may have a way for humans to drive it.