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Stocks rose and bonds steadied ahead of today’s core PCE report, which could shift expectations for an October Fed rate hike. Meanwhile, oil fell as Middle Eastern supply flows recovered, while stronger-than-expected UK growth supported the pound.

Brent crude remained elevated as optimism over a near-term reopening of the Strait of Hormuz faded, while equity futures fell to one-week lows. Treasury yields rose as markets increased bets on further Fed rate hikes, with attention now turning to this week’s US employment data.

Stocks and bonds fell while oil prices rose after President Trump rejected Iran’s latest proposal to reopen the Strait of Hormuz. The continued disruption to energy supplies is fuelling inflation concerns and expectations of another Fed rate hike, with attention now turning to renewed talks and Friday’s US payrolls report.