NEW YORK: Bond yields rose, and stocks fell on Monday as oil prices jumped, with a resumption of military clashes between the US and Iran adding to worries about inflation.
US President Donald Trump was quoted on Monday as promising to “hit them hard” after Iran launched missiles overnight at two US air bases in Jordan in response to a US attack on Iran’s Larak Island.
US crude rose 2.54 per cent to $85.51 a barrel and Brent climbed to $90.34 per barrel, up 2.54pc on the day.
That kept alive the risk of further interest rate increases from major central banks. Federal Reserve Chairman Kevin Warsh’s speech at Jackson Hole on Friday boosted bets on a September interest rate rise by the Fed.
Fed funds futures traders are now pricing in 64pc odds of a September rate hike, up from around 35pc before Warsh’s comments on Friday. The European Central Bank is widely expected to hike rates when it meets on Sept 9 and 10.
Longer-dated US Treasury yields were higher, with the yield on the benchmark US 10-year Treasury note up 3.8 basis points at 4.764pc, its highest since Jan 15, 2025. Earlier, Japan’s 2-year government bond yield rose to a 31-year high, while German and French two-year bond yields also climbed.
On Wall Street, the Dow Jones Industrial Average fell 356.59 points, or 0.67pc, to 53,203.40, the S&P 500 fell 37.75 points, or 0.49pc, to 7,674.22 and the Nasdaq Composite fell 103.71 points, or 0.39pc, to 26,298.72.
“It’s a market now that’s really beginning to feel the weight of climbing yields,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. Spot gold fell 0.45pc to $4,432.84 an ounce.
Published in Dawn, September 1st, 2026
