Business & Markets
Stocks fall as oil spike lifts rate hike bets
Stocks fell Wednesday as oil prices extended gains and bond yields stayed near multi-decade highs, with investors increasing bets on further interest rate rises after renewed US-Iran attacks.
Crude has risen about 10% since the United States hit an Iranian island in the Strait of Hormuz at the weekend, followed by tit-for-tat attacks in which Tehran targeted American interests in several regional countries. At about 0715 GMT, West Texas Intermediate was up 0.5% at $90.67 a barrel and Brent North Sea crude was up 0.8% at $95.43.
The strait, through which about a fifth of world oil and gas passes, was effectively closed for the foreseeable future. Higher energy costs added to inflation concerns, alongside worries about government spending and corporate debt sales.
Government borrowing costs remained high. The yield on 30-year UK government bonds was at its highest since 1998, while 10-year UK yields were at levels last seen during the 2007-08 global financial crisis. Japan's 10-year bond yield was at a 30-year high, 30-year US Treasury yields were just below their 2007 level and the US 10-year yield was also at financial-crisis levels.
Rajeev De Mello of Gama Asset Management said renewed US-Iran attacks and their effect on oil prices had made investors more concerned about bonds. He said higher yields were a headwind for Asian equities, especially technology shares.
Asian markets fell. Tokyo's Nikkei 225 closed down 2.9%, Hong Kong's Hang Seng Index was down 0.4% and Shanghai's Composite Index closed down 1.0%. Sydney, Taipei, Mumbai, Bangkok, Jakarta and Manila were also lower. London, Frankfurt and Paris opened slightly lower.
The selling followed losses on Wall Street, where the Dow closed down 0.8%. Investors are awaiting jobs and inflation data before the Federal Reserve's next meeting in two weeks. Traders were pricing in a 70% probability of a rate increase, according to Bloomberg.
Federal Reserve governor Michael Barr said policymakers should be ready to raise rates if inflation remains above the central bank's 2% target. He said officials could take more time to assess policy if inflation appeared to be moderating toward the target, but should act decisively if it did not moderate enough.
Update
West Texas Intermediate was up 0.5% at $90.67 and Brent was up 0.8% at $95.43 at about 0715 GMT.
Tokyo's Nikkei 225 closed down 2.9%, Hong Kong's Hang Seng was down 0.4% and Shanghai's Composite closed down 1.0%.
London, Frankfurt and Paris opened slightly lower, with the FTSE 100 down 0.1% at about 0715 GMT.
Rajeev De Mello of Gama Asset Management said renewed US-Iran attacks and their effect on oil prices had increased investor concern about bonds.
Source note: AFP news report published on 2 September 2026 at 07:32:10 UTC.
Update
Crude rose more than 2% and was up about 10% for the week after a fresh flare-up in Middle East tensions.
West Texas Intermediate was up 1.5% at $91.60 a barrel and Brent was up 1.9% at $96.45 around 0230 GMT.
Asian markets fell, with Tokyo down 2.6%, Hong Kong down 1.1% and Shanghai down 1.1%.
Bloomberg said traders were pricing in a 70% probability of a Federal Reserve rate hike at the next meeting.
Federal Reserve governor Michael Barr said policymakers should be ready to raise rates if inflation does not moderate enough.
Source note: AFP news report published on 2 September 2026 at 02:45:00 UTC.
Update
Wall Street closed lower, with the Dow down 0.8% and the Nasdaq down 1.0%.
Brent crude rose 4.6% to $94.65 a barrel and West Texas Intermediate rose 5.2% to $90.22 around 2000 GMT.
The 10-year US Treasury yield rose to its highest level since the 2007-08 global financial crisis, according to AFP's account.
Investors were weighing US manufacturing and jobs openings data before the Federal Reserve's September 16 policy meeting.
Source note: AFP news report published on 1 September 2026 at 20:16:26 UTC.
Update
European stocks closed lower while Wall Street remained in the red in late morning trading.
Eurozone inflation reached 3.3% in August, a three-year high, strengthening expectations of an ECB rate rise next week.
Oil prices rose more than 2% as traders reacted to renewed US-Iran military action and further threats by US President Donald Trump.
Shein shares fell as much as 10% on their Hong Kong debut before closing almost flat.
Source note: AFP news report published on 1 September 2026 at 15:54:33 UTC.
Update
About 20 minutes into trading, the Dow was down 0.5%, the S&P 500 down 0.6% and the Nasdaq down 1.0%.
A Greek security company reported that two crude tankers were struck by unknown projectiles in the Strait of Hormuz.
Iran's President Masoud Pezeshkian offered to return to a ceasefire deal, according to the market report.
Source note: AFP news report published on 1 September 2026 at 14:07:07 UTC.
Update
Wall Street opened lower, with the Nasdaq Composite down 1.3% at around 1330 GMT.
The 30-year US Treasury yield stood at just under 5.3%, while the 10-year yield rose to its highest level since January 2025.
Brent crude was up 2.4% at $92.67 a barrel and West Texas Intermediate was up 2.9% at $88.25 a barrel at around 1330 GMT.
US President Donald Trump threatened to hit Iran “hard” as traders reacted to renewed US-Iran fighting.
US Treasury Secretary Scott Bessent told CNBC he expected Japan to support the yen.
Source note: AFP news report published on 1 September 2026 at 13:53:04 UTC.
Uncertainty notes
The supplied item gives different descriptions of Tokyo's decline in the text and in the key figures; the story uses the specific key figure for the Nikkei 225 close.
Source
AFP news report published on .