04:35 PM EDT, 10/01/2024 (MT Newswires) -- US benchmark equity indexes fell Tuesday as oil prices surged amid escalating tensions in the Middle East.

The S&P 500 dropped 0.9% to 5,708.8, and the Dow Jones Industrial Average declined 0.4% to 42,157, both retreating from Monday's record closing highs. The Nasdaq Composite slid 1.5% to 17,910.4. Among sectors, technology posted the steepest decline, while energy led the gainers.

Iran carried out a ballistic missile attack on Israel in retaliation over the recent killing of a Hezbollah leader and an Iranian commander in Lebanon, media outlets reported. Israel will give a "significant response" to Iran's attack, CNN reported, citing an Israeli official.

West Texas Intermediate crude oil jumped 3.6% to $70.65 a barrel.

In economic news, the US manufacturing sector remained in contraction territory in September amid soft demand and declining employment, according to data from the Institute for Supply Management and S&P Global ( SPGI ) .

"Combined with the (Federal Reserve) embarking on its rate-cutting cycle, there are some glimmers of optimism for a sector that has struggled under the weight of higher interest rates," TD Economics said in a report.

The ISM and S&P Global's ( SPGI ) reports on the US services sector performance for last month are scheduled for Thursday.

US job openings climbed to 8.04 million as of the last day of August from July's 7.71 million print, according to the Bureau of Labor Statistics' Job Openings and Labor Turnover survey. The consensus was for a 7.67 million level in a survey compiled by Bloomberg.

"The labor market is rebalancing to a state that supports stability without putting upward pressure on inflation," Jefferies said in a note.

The International Longshoremen's Association union began a strike along the US East and Gulf Coast early Tuesday after rejecting the United States Maritime Alliance's final proposal on a new contract, prompting a shutdown of ports from Maine to Texas.

The US 10-year yield fell 6.3 basis points to 3.74%, while the two-year rate decreased 4.3 basis points to 3.61%.

In company news, Apple's ( AAPL ) suppliers may have to import parts from China or elsewhere after a fire caused extensive damage at Tata Group's iPhone component plant in India over the weekend, Reuters reported. Apple's ( AAPL ) shares fell 2.9%, the second-steepest decline on the Dow.

Paychex ( PAYX ) shares rose 4.9%, the biggest gain on the S&P and the second-largest gain on the Nasdaq, after the company posted higher-than-expected fiscal Q1 results and reiterated revenue and profit guidance.

McCormick ( MKC ) raised its full-year earnings outlook as the spices and seasonings producer reported better-than-expected fiscal Q3 results. The shares climbed 2.2%.

Gold increased 0.8% to $2,679.90 per troy ounce, while silver rose 0.5% to $31.61 per ounce.