Overview
- U.S. forces struck two Iranian rocket launchers on Larak Island on Sunday, an operation U.S. Central Command acknowledged and which Iranian outlets said drew retaliatory strikes on U.S. forces in Jordan.
- Brent and U.S. crude rose roughly 2.7–3%, sending global energy stocks higher and prompting Asian equity indexes and U.S. futures to fall on renewed supply‑risk concerns for the Strait of Hormuz.
- Kevin Warsh’s hawkish Jackson Hole remarks that inflation has not meaningfully eased had already raised the market’s baseline for tighter policy; traders pushed the CME FedWatch probability of a September hike to about 57–60% after the weekend events.
- Short‑term government yields climbed sharply—U.S. two‑year yields near the mid‑4% range while Japan’s two‑year hit a multi‑decade high and Germany’s two‑year rose to its highest since July 2024—pressuring growth and tech stocks.
- Investors are now focused on near‑term U.S. data, especially Friday’s August jobs report and mid‑September inflation readings, because those prints will determine whether the Fed acts in September or delays further tightening.