/images/ppid_59c68470-image-178830753463063044.webp)
/images/ppid_59c68470-image-178833004103112990.webp)
/images/ppid_59c68470-image-178827256497842666.webp)
/images/ppid_59c68470-image-178822003929470205.webp)
What is the story about?
A re-escalation in hostilities between the US and Iran led to a spurt in crude oil prices on Tuesday, September 1, and triggered a sell-off in benchmark indices on Wall Street as well as in the global bond markets.
The Dow Jones ended the session with losses of over 400 points, the S&P 500 fell 0.7%, while the Nasdaq Composite ended 1% lower. The chip-stocks-heavy Nasdaq 100 index fell 1.3%.
Why Did Oil Prices Rise On Tuesday?
Brent Crude surged past the mark of $95 a barrel on Tuesday after the US Central Command said that it has launched targeted strikes against the Iran Revolutionary Guard Corps (IRGC), the completion of which was announced in the early hours on Wednesday.
US President Donald Trump also threatened Iran in a Truth Social post, stating that if Iran retaliates against this "very justified" attack, they will hit them harder and an even bigger attack is waiting in the wings, following which "nothing much will be left of the Islamic Republic of Iran."
An IRGC spokesperson said in a statement that Iran will respond to these attacks. Explosions were heard in the South Jordanian city of Aqaba.
Global Bonds Sell-Off
Rising oil prices meant that bond yields headed northwards, not just in the US, but across the globe.
The 10-year yield in the US is now nearing levels of 4.8%, last seen in January 2025. The 30-year yield is also nearing pre-intervention levels, currently six basis points away from those highs.
Japan's 10-year yield crossed the 3% mark for the first time in three decades, while the UK 30-year yield surged to the highest level since March 1998.
Impact Of The Recent Global Developments
As a result of the recent developments, Wells Fargo has joined JPMorgan in turning cautious on US stocks as September has historically been the worst month of the calendar year for US equities. The average fall seen on the S&P 500 in September is 0.8%, compared to an average 0.9% gain for the rest of the year.
The war has also begun to strain finances of gulf countries with Saudi Arabia selling bonds worth $3.25 billion, after reports earlier indicated that they were seeking emergency loans to the tune of $8 billion. Kuwait too has allowed borrowing from its $1 trillion Sovereign Wealth Fund to support its state finances, a move last seen during the Iraq war of 1990.
What Are The Cues For Wall Street Today?
Barring the recent developments, Wall Street will be awaiting results from Broadcom, Snowflake and Hewlett Packard Enterprises. ADP's employment figures, along with factory order figures will also be reported.
The US economy expanded for the 22nd month in a row in August, with the manufacturing figure of 54.6, down from 55.6 in July, but above the mark of 50, which indicates expansion.
The Dow Jones ended the session with losses of over 400 points, the S&P 500 fell 0.7%, while the Nasdaq Composite ended 1% lower. The chip-stocks-heavy Nasdaq 100 index fell 1.3%.
Why Did Oil Prices Rise On Tuesday?
Brent Crude surged past the mark of $95 a barrel on Tuesday after the US Central Command said that it has launched targeted strikes against the Iran Revolutionary Guard Corps (IRGC), the completion of which was announced in the early hours on Wednesday.
US President Donald Trump also threatened Iran in a Truth Social post, stating that if Iran retaliates against this "very justified" attack, they will hit them harder and an even bigger attack is waiting in the wings, following which "nothing much will be left of the Islamic Republic of Iran."
An IRGC spokesperson said in a statement that Iran will respond to these attacks. Explosions were heard in the South Jordanian city of Aqaba.
Global Bonds Sell-Off
Rising oil prices meant that bond yields headed northwards, not just in the US, but across the globe.
The 10-year yield in the US is now nearing levels of 4.8%, last seen in January 2025. The 30-year yield is also nearing pre-intervention levels, currently six basis points away from those highs.
Japan's 10-year yield crossed the 3% mark for the first time in three decades, while the UK 30-year yield surged to the highest level since March 1998.
| Bond | Yield Highest Since |
| US 10-Year | January 2025 |
| Japan 10-Year | 1996 |
| Japan 30-Year | 1995 |
| UK 10-Year | June 2008 |
| UK 30-Year | March 1998 |
| German 10-Year | 52-Week High |
| German 2-Year | July 2024 |
| France 2-Year | April 2024 |
Impact Of The Recent Global Developments
As a result of the recent developments, Wells Fargo has joined JPMorgan in turning cautious on US stocks as September has historically been the worst month of the calendar year for US equities. The average fall seen on the S&P 500 in September is 0.8%, compared to an average 0.9% gain for the rest of the year.
The war has also begun to strain finances of gulf countries with Saudi Arabia selling bonds worth $3.25 billion, after reports earlier indicated that they were seeking emergency loans to the tune of $8 billion. Kuwait too has allowed borrowing from its $1 trillion Sovereign Wealth Fund to support its state finances, a move last seen during the Iraq war of 1990.
What Are The Cues For Wall Street Today?
Barring the recent developments, Wall Street will be awaiting results from Broadcom, Snowflake and Hewlett Packard Enterprises. ADP's employment figures, along with factory order figures will also be reported.
The US economy expanded for the 22nd month in a row in August, with the manufacturing figure of 54.6, down from 55.6 in July, but above the mark of 50, which indicates expansion.
/images/ppid_59c68470-image-178839255249689897.webp)
/images/ppid_59c68470-image-178836013771451086.webp)
/images/ppid_59c68470-image-178832005829660505.webp)
/images/ppid_59c68470-image-178832752535431833.webp)
/images/ppid_59c68470-image-178835502990798905.webp)
