Stocks, Bonds Fall as US-Iran Risks Spark Oil Jump: Markets Wrap
(Bloomberg) — A surge in oil prices rippled through global markets, hitting stocks and bonds on worries that potential inflationary pressures would force the Federal Reserve to boost interest rates.
West Texas Intermediate crude rose to around $90 as the US launched a new wave of strikes against Iranian targets around the Strait of Hormuz, raising concern about further disruptions. Those risks lifted global yields to the highest since 2008, reducing appetite for equities at the start of a seasonally weak month. The S&P 500 was also dragged down by a rout in chipmakers.
US Central Command said it began strikes on Islamic Revolutionary Guard Corps targets following Iran’s attacks on commercial shipping and American forces in the region. Explosions were heard in Bandar Abbas and Chabahar in southern Iran, state-run Nour news reported Tuesday.
The exchanges followed weeks of relative calm, during which President Donald Trump’s administration said it was pivoting from military action to applying economic measures to pressure Tehran. Both sides have shown little appetite to resume negotiations since the collapse of an interim peace agreement signed more than two months ago.
Treasury Secretary Scott Bessent dismissed the importance of the Strait of Hormuz, saying the waterway that’s been controlled by Iran during the recent conflict will get bypassed by oil pipelines. He spoke in a fireside chat with Larry Kudlow at a gathering of global finance chiefs.
Meantime, investors are demanding greater compensation to hold bonds as concerns about persistent inflation, government spending and surging corporate borrowing to finance the artificial-intelligence buildout intensify. Against this backdrop, money markets see a Fed hike as more likely than not in September.
“The stock market has been able to ignore these moves so far this year,” said Matt Maley at Miller Tabak. “However, as we have seen in the past, higher yields don’t matter for stocks until they do.”
Expectations for a hike increased last week after Fed Chairman Kevin Warsh warned in a major speech in Jackson Hole, Wyoming, that inflation wasn’t slowing meaningfully and said officials would need to act if price pressures don’t ease soon.
“Warsh will be attentive to the impact that higher oil has on inflation compensation across all horizons and on bond yields,” said Krishna Guha at Evercore. “A single Fed hike would have a trivial effect on longer-term yields and even two or three may not have much impact.”
But pressure on yields will push Warsh to require a more clear-cut signal from the data that it is reasonable to pass on a September hike, he added.
Corporate Highlights:
Apple Inc.’s Tim Cook handed over the reins to John Ternus, capping a tenure as chief executive officer that cemented the company as an iconic global brand and turned its stock into one of the most reliable bets. Anthropic PBC agreed to a $35 billion computing deal with Lambda, a cloud provider backed by Nvidia Corp., part of an effort to quickly expand its AI capacity, according to a person familiar with the matter. GoPro Inc. soared after the action camera maker entered into a definitive merger agreement with privately held company Starman Optical Inc. Fervo Energy Co. signed a deal to sell almost 400 megawatts of power to Alphabet Inc.’s Google for a prospective data center in Utah. Chevron Corp. is finalizing a deal that will significantly expand its operations in Venezuela by adding two giant oil fields in the Orinoco Belt, part of a push by US President Donald Trump to ramp up production in the South American country. What Bloomberg strategists say…
“Rates volatility is generally well-contained; that matters, because most of the significant downdrafts in stock prices over the past few years have coincided with spikes in rate vol.”
—Cameron Crise, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 fell 0.6% as of 1 p.m. New York time The Nasdaq 100 fell 1% The Dow Jones Industrial Average fell 0.8% The MSCI World Index fell 0.6% Currencies
The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.3% to $1.1586 The British pound fell 0.3% to $1.3515 The Japanese yen fell 0.3% to 160.17 per dollar Cryptocurrencies
Bitcoin fell 1.6% to $77,590.88 Ether fell 1.6% to $2,433.27 Bonds
The yield on 10-year Treasuries advanced four basis points to 4.79% Germany’s 10-year yield advanced two basis points to 3.34% Britain’s 10-year yield advanced 16 basis points to 5.22% Commodities
West Texas Intermediate crude rose 4.4% to $89.52 a barrel Spot gold fell 1.9% to $4,354.85 an ounce ©2026 Bloomberg L.P.
