1st September 2026 – (Hong Kong) United States equities retreated on Monday after the first publicly acknowledged exchange of fire in a month between the US and Iran, a flare‑up that propelled crude prices and government bond yields higher. The S&P 500 eased 0.33 per cent to 7,686.14, the Nasdaq Composite dipped 0.12 per cent to 26,370.89, and the Dow Jones Industrial Average fell 374.09 points, or 0.7 per cent, to 53,185.90, weighed by losses in Goldman Sachs and Alphabet.
US Central Command said it struck two rocket launchers on Iran’s Larak Island on Sunday, the first such action since late July, while Iranian media reported attacks on US bases in Jordan in response. The escalation helped send West Texas Intermediate up 2.83 per cent to settle at US$85.76 a barrel and Brent higher by 2.71 per cent to US$90.49, feeding a rise in longer‑dated Treasury yields and souring equity sentiment.
Despite oil edging to the top of its recent range, Tom Hainlin of US Bank Asset Management said prices near US$80 to US$90 a barrel are unlikely to derail growth, though a move above US$100 could prove “pretty prohibitive.” Inflation concerns nevertheless kept yields elevated through August. Federal Reserve Chair Kevin Warsh cautioned on Friday that recent better‑than‑expected readings have not yet signalled a meaningful improvement in underlying trends.
Even with the late‑month volatility, Wall Street finished August higher. The Dow advanced a little over 1 per cent for a fifth straight monthly gain and has now risen in 15 of the past 16 months. The S&P 500 and Nasdaq notched their first monthly increases since May, up 2.6 per cent and 3.9 per cent respectively, with both the S&P 500 and Dow touching record highs earlier in the month. Technology led the charge as artificial‑intelligence‑linked names outperformed; the S&P 500 tech sector rose more than 6 per cent in August, with Nvidia up about 10 per cent, Microsoft more than 9 per cent and Micron Technology more than 16 per cent.
Rising global yields added to Tuesday’s cautious start to September trading, with the US 10‑year note approaching levels unseen since January 2025, Japan’s 10‑year touching highs last seen in August 1996 and Germany’s benchmark yield reaching a 2011 peak. Traders cited the risk that persistently higher oil prices could rekindle inflation and influence the Federal Reserve’s decision later this month, while seasonal weakness for equities in September also loomed.
Strategists at Citi, led by Scott Chronert, said the market still has scope to broaden beyond artificial‑intelligence winners into more cyclical sectors, provided oil eases and long‑end yields decline, giving the Fed room for a more dovish stance if labour data softens. Jefferies analysts, including Edison Lee, noted that an appreciating Chinese yuan could temper the impact of prospective iPhone price rises on margins. Separately, Piper Sandler upgraded Akamai Technologies to overweight, arguing that accelerating demand for compute and application security, alongside a robust pipeline and capacity additions, supports the company’s longer‑term growth despite higher capital spending.
Investors now look to a busy US data slate, with the August jobs report due on Friday morning and fresh readings for manufacturing and services activity. Attention will also turn to Asheville, North Carolina, where finance ministers from the Group of 20 are meeting amid elevated market sensitivity to policy signals.
