New York, Aug 31: Global markets began the final trading day of August on a cautious note as renewed US-Iran tensions pushed crude oil prices higher and increased concerns about inflation and interest rates.
US stock futures moved lower in early trading, with Dow futures falling 0.29%, S&P 500 futures declining 0.36% and Nasdaq-100 futures slipping 0.40%. Asian markets also remained under pressure, reflecting growing investor concerns over geopolitical risks and higher energy costs.
The latest weakness followed US strikes on Iranian rocket launchers on Larak Island near the strategically important Strait of Hormuz. Iran subsequently retaliated, raising fears that the conflict could intensify and disrupt regional energy supplies.
Oil markets reacted sharply. Brent crude climbed above the $90-a-barrel mark, while US West Texas Intermediate also gained more than 2% in early trade. Higher crude prices are a fresh concern for global markets as they could add to inflationary pressures and increase operating costs for businesses.
Investor sentiment is also being affected by expectations of tighter US monetary policy. Recent comments from Federal Reserve Chair Kevin Warsh have strengthened bets that the central bank could keep rates higher for longer, with markets raising the probability of a September rate increase. Higher bond yields can put pressure on equities, particularly growth and technology stocks.
Despite the cautious start, Wall Street is still heading towards a relatively strong August. Technology stocks have been among the key drivers of gains during the month, helping the major US indices remain close to record levels.
Markets are now entering a crucial week, with investors closely watching US employment data, manufacturing and services activity and further developments in the Middle East. The upcoming economic data could provide fresh clues about the Federal Reserve’s next policy move.
For investors, the immediate focus is likely to remain on three major factors — oil prices, US interest-rate expectations and geopolitical developments. A sustained rise in crude could increase inflation concerns, while any further escalation around the Strait of Hormuz could trigger another wave of volatility across global equities.
With August drawing to a close, markets are entering September with a more cautious outlook as investors balance strong corporate and technology-sector performance against rising geopolitical and monetary-policy risks.