Global stocks fell on Wednesday, September 2, as US-Iran market turmoil pushed Brent crude toward $95 a barrel and intensified inflation and interest-rate concerns, according to Reuters and Bloomberg.
Washington struck Iranian military targets near the Strait of Hormuz in the Middle East, while Tehran said it targeted U.S. assets across the region. Reuters described the exchange as the most significant between the United States and Iran since July.
Brent crude futures rose 0.6% to $95.18 a barrel in Reuters trading. Bloomberg separately reported Brent hovering near $95 after Washington carried out its second round of attacks against Iran in three days.
Bloomberg’s 6:58 a.m. The New York market snapshot showed S&P 500 futures down 0.2% and Nasdaq 100 futures down 0.5%. The STOXX Europe 600 lost 0.7%, while the MSCI World Index declined 0.3%.
Asian markets suffered sharper losses. Reuters reported South Korea’s KOSPI fell almost 4%, while Japan’s Nikkei 225 dropped 2.9%.
Read: Oil Prices Jump Above $94 as US-Iran Fighting Escalates
The bond selloff also continued. Bloomberg put the 30-year U.S. Treasury yield at about 5.28%, near a 19-year high, while Reuters reported the benchmark 10-year yield at 4.8182%, close to a three-year high.
Higher energy prices strengthened expectations that inflation could remain elevated. Bloomberg reported that traders priced in a nearly 70% probability of a September Federal Reserve rate increase.
Read: Oil Prices Jump Above $90 as US-Iran Fighting Flares
Chris Turner of ING Groep said, as reported by Bloomberg, that markets increasingly viewed a September Fed hike as the baseline because inflation was not falling quickly enough.
The U.S. dollar gained modestly as higher yields and geopolitical tensions increased demand for safer assets, Reuters reported.
