Overview
- U.S. forces struck IRGC targets and Tehran retaliated by targeting U.S. assets in the region, a series of engagements reported on Sept. 1 that re‑opened military risk around the Strait of Hormuz.
- Brent and WTI crude rallied above $90 per barrel as reports of strikes and attacks on tankers raised the prospect of further disruption to the shipping chokepoint that handles about one‑fifth of global oil flows.
- Global government bond yields jumped to multi‑year highs, with the U.S. 10‑year near 4.79–4.81% and Japan’s 10‑year around 3%, as investors demanded higher compensation for inflation and fiscal risk.
- Money‑market pricing and Fed‑funds futures moved sharply higher for a September hike, and U.S. equities fell—long‑duration tech and other interest‑sensitive sectors led the losses while energy stocks outperformed.
- Heavy government deficits and record corporate borrowing have left long‑term yields vulnerable, which could raise borrowing costs for households and businesses and keep financial conditions tighter if oil and inflation stay elevated.