Market Summary
US Equities Fall as US-Iran Fighting Escalates: US equities came under pressure during yesterday’s session, with the S&P 500 and Nasdaq falling 0.71% and 1.03%, respectively, following renewed fighting between the US and Iran. The escalation has increased concerns about geopolitical risk and potential disruptions to global energy markets, adding pressure on risk assets. Nasdaq 100 futures are down 0.20% this morning, suggesting a cautious start to today’s session.
Oil Surges as Strait of Hormuz Risks Rise: Brent crude jumped 5% yesterday, moving above all of its key moving averages, and has continued higher this morning, rising 0.83% to around $95.44 a barrel. The rally marks a fourth gain in five sessions as renewed US-Iran fighting heightens concerns about potential disruptions to energy flows through the Strait of Hormuz. Rising energy prices are adding another source of inflationary pressure and could further complicate the outlook for central bank policy.
Global Bond Rout Deepens: Rising energy costs have intensified concerns about persistent inflation, pushing global bond yields to their highest levels since 2008. The US 10-year Treasury yield rose by one basis point to 4.81%, its highest level since late 2023. The US 30-year yield has also climbed back towards levels seen before Treasury Secretary Scott Bessent expanded the Treasury buyback programme in an effort to contain long-term borrowing costs. Markets are increasingly concerned that higher energy prices could force the Federal Reserve and other central banks to keep rates higher for longer.
Fed Rate-Hike Bets Increase: Expectations for tighter US monetary policy have continued to build following Fed Chair Kevin Warsh’s Jackson Hole speech last week. Money markets are now assigning roughly a 70% probability to a September rate increase, up from around 34% before his remarks. The combination of renewed inflationary pressure from energy prices and Warsh’s emphasis on price stability has strengthened expectations that the Fed may prioritise inflation control over near-term growth concerns.
Gold Extends Decline: XAU/USD fell 2.68% yesterday and has continued lower this morning, declining 0.22% to around $4,319 an ounce. Higher Treasury yields, rising rate-hike expectations and a stronger focus on inflation risks have weighed on the non-yielding metal. Gold’s decline comes despite renewed geopolitical tensions, highlighting the pressure from higher real yields and tighter monetary policy expectations.
US-Iran Tensions Keep Markets on Edge: The US military said it had completed its strikes, while Iran reported launching a missile attack on a US air base in Jordan. The exchange follows weeks of relative calm, during which the Trump administration had shifted from military action towards economic pressure on Tehran. The renewed confrontation has increased geopolitical uncertainty and intensified concerns about energy supplies, adding to the challenges facing global markets.
Economic Calendar
- US ADP Employment Change
- US MBA Mortgage Applications
- Russia Unemployment Rate
Key Market Moves Today
- S&P 500 Futures: -0.11% (7,634.0)
- US 10-Year Yield: +0.60 bps (4.81%)
- Brent Crude: +0.83% ($95.44)
- Bitcoin: +0.13% ($77,518)
- Spot Gold: -0.22% ($4,319.40)
**For professional investors only** Any opinions, news, research, analyses, prices, or other information contained in this blog is provided as general market commentary and does not constitute (and should not be construed as containing) investment advice or an investment recommendation, or an offer of, or solicitation for, a transaction in any financial instrument. Some of this information may have been provided by third-party sources and, although believed to be reliable, it has not been independently verified and its accuracy or completeness cannot be guaranteed. No representation or warranty, expressed or implied, is made or given by or on behalf of iSAM Securities or its directors or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this blog, and no responsibility or liability is accepted for any such information. As a result, any person acting on any information does so entirely at their own risk. iSAM Securities will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
