Market Wrap: The US Strikes Iran, Oil Hits the Markets
Date: September 2, 2026
Geopolitical Tensions
Market sentiment has been significantly affected by escalating tensions in the Persian Gulf. Iran has reportedly attacked two additional cargo ships, prompting the US to respond with a series of strikes on Iranian targets. This geopolitical instability has contributed to a fragile market environment.
Bond Market Activity
The bond market is experiencing a sell-off, with US 10-year Treasury yields climbing to 4.8%. In Europe, yields are also on the rise, with French 10-year bonds exceeding 4.75%, German bonds at 3.34%, and UK 10-year gilts surpassing 5.2%.
Equity Market Response
Despite the geopolitical tensions, equity indices have shown a relatively calm reaction. Major European indices are seeing small gains, with Spain's SPA35 and Poland's W20 futures up approximately 0.45% and 0.6%, respectively.
Company News
- Nokia (NOKIA.FI): The telecom giant is set to return to the Euro Stoxx 50 index, replacing Wolters Kluwer.
- Pearson (PSON.UK): The education company has seen a decline of about 2% despite a strong earnings report and positive recommendations from investment banks.
- BP (BP.UK): The company is retracting initial gains following the appointment of Ian Tyler as chairman, even amidst high oil prices.
- Lottomatica: The Italian sports betting operator has dropped about 10% after announcing the acquisition of Cirsa, a Spanish company.
Macroeconomic Data Releases
Key macroeconomic data from the US is anticipated, including:
- ADP employment report expected to rise to 48,000 from 44,000.
- Durable goods orders data expected to show growth accelerating to 1.1% from 0.5%.
- Crude oil and distillate inventory changes expected to show a decline of over 1 million barrels.
Commodities Market
A broad sell-off is evident in agricultural commodities, driven by inflation concerns, rising interest rates, and profit-taking. Cocoa futures have dropped about 5%, while coffee, wheat, and cotton have decreased by approximately 2%. Oil prices are slightly off their recent peak, holding around USD 94, while European gas prices have risen above EUR 72.
Forex Market Movements
In the foreign exchange market, the New Zealand dollar has seen a sharp decline, influenced by a strong GDP report from Australia, with NZD/USD down more than 1%. The Japanese yen has gained moderately, possibly reflecting market expectations of further intervention or adjustments in monetary policy.
Cryptocurrency Market
Worsening risk sentiment is exerting moderate pressure on cryptocurrencies, with Bitcoin down about 0.5% and Ethereum and Solana both down approximately 1.4%.