(Updates with index/price moves, macroeconomic data, and geopolitical news from the first paragraph.)

US equity indexes fell after an inflation gauge jumped at the quickest pace in three months while an Iran-aligned militia group's threat to the alternative shipping route through the Strait of Hormuz grew stronger.

The Nasdaq Composite declined 0.5% to 26,125.1, the S&P 500 retreated 0.5% to 7,598.2, and the Dow Jones Industrial Average dropped 0.6% to 52,078.3 after midday Thursday.

The Bureau of Labor Statistics' wholesale price inflation gauge, the Producer Price Index, jumped 5.4% from a year ago in August, above the 5.3% forecast in a Bloomberg-compiled survey. The PPI edged up 0.4% month over month, as expected, following a 0.1% increase in July. The August print is the highest growth rate since May.

US Treasury yields jumped after midday. The two-year soared 11 basis points to 4.54%, the highest since mid-2024. The 10-year yield surged eight basis points to 4.92%, its strongest level since late 2023.

Iran-aligned Houthis seized control of Yemen's port city of Mocha on Thursday, military sources said, gaining further leverage over the Bab el-Mandeb Strait, the southern outlet of the Red Sea and an important shipping route, according to a report from Reuters.

The front-month US West Texas Intermediate crude oil contract jumped 4.8% to $100.68 per barrel, and global benchmark North Sea Brent advanced 4.9% to $106.21 per barrel.