Stocks Fall as US-Iran Strikes Spur Rally in Oil: Markets Wrap
(Bloomberg) — A flare-up in geopolitical risks sent stocks and bonds lower as oil jumped, raising concerns about inflationary pressures that could make the Federal Reserve raise interest rates.
Escalating tensions in the Middle East drove US crude above $85, with higher energy costs lifting Treasury 10-year yields to the highest since January 2025. The S&P 500 trimmed its August advance.
The US and Iran exchanged strikes for the first time in about a month as American forces hit an island in the Strait of Hormuz and the Islamic Republic responded by launching attacks on the United Arab Emirates and Jordan. President Donald Trump told Fox News the US would respond to Iran’s attacks, without giving details.
The wave of hostilities dashed hopes for a normalization of traffic through the waterway, with elevated oil prices reinforcing bets on higher rates after Fed Chair Kevin Warsh reiterated his commitment to bringing down inflation. While much hinges on employment data this week and inflation figures to follow, traders see a hike as more likely than not in September.
With traders tracking geopolitical volatility as well as potential seasonal volatility, it will be interesting to see which market impulse from last week might carry over to this week,” said Chris Larkin at E*Trade from Morgan Stanley. “Unexpectedly strong labor-market data this week might be taken as bad news by the market, since it could reinforce expectations for a rate hike.”
The US jobs report Friday is expected to be consistent with general steadiness in the labor market that’s helping the Fed focus more intently on its battle with inflation. Economists estimate the data will show a 55,000 increase in August payrolls after an unexpected dip in July employment. Such a result would be broadly in line with average job growth this year.
The unemployment rate, based on a survey of households rather than establishments, is seen holding at 4.1%.
Friday’s jobs report “will be critical,” with figures on consumer prices, due on Sept. 11, being the more important of the two prints, given Warsh’s view that the US is at full employment, according to JPMorgan Chase & Co.’s trading desk.
The bank’s traders, led by Andrew Tyler, have shifted from tactically bullish to a cautious stance on US stocks as they see the next two-to-three weeks being choppy for equity markets, but say market fundamentals from economics to earnings remain intact.
Corporate Highlights:
Nvidia Corp. is investing $3.5 billion into MediaTek Inc., deepening collaboration with the Taiwanese chipmaker at a time when it’s working to persuade more companies to build chips that plug into its dominant data center ecosystem. Anthropic PBC’s IPO is casting a long shadow over companies’ US listing plans, as they try to find room for their deals to grab attention after the Sept. 7 Labor Day holiday. PG&E Corp., Edison International and Sempra sank after unfavorable California wildfire legislation prompted a wave of analyst downgrades. GameStop Corp. said preliminary net sales for the second quarter will be between $780 million to $800 million, above the consensus estimate of $757 million. Eli Lilly & Co. plans to buy Merida Biosciences Inc. for as much as $2.88 billion in cash to expand in autoimmune and allergic diseases, part of an effort to build beyond the weight-loss and diabetes markets that made it the largest pharmaceutical company in the world. Some of the main moves in markets:
Stocks
The S&P 500 fell 0.4% as of 10 a.m. New York time The Nasdaq 100 fell 0.1% The Dow Jones Industrial Average fell 0.6% The Stoxx Europe 600 fell 0.3% The MSCI World Index fell 0.4% Currencies
The Bloomberg Dollar Spot Index fell 0.1% The euro rose 0.1% to $1.1599 The British pound was little changed at $1.3542 The Japanese yen rose 0.2% to 159.83 per dollar Cryptocurrencies
Bitcoin fell 0.9% to $77,863.27 Ether fell 2% to $2,440.14 Bonds
The yield on 10-year Treasuries advanced four basis points to 4.76% Germany’s 10-year yield advanced four basis points to 3.32% Britain’s 10-year yield advanced three basis points to 5.06% Commodities
West Texas Intermediate crude rose 3.1% to $85.98 a barrel Spot gold fell 0.8% to $4,420.70 an ounce ©2026 Bloomberg L.P.
