This content was published on
August 31, 2026 - 12:16
4 minutes
(Bloomberg) — US stock futures slipped in thin trading and oil prices jumped on the back of renewed hostilities in the Middle East.Futures on the S&P 500 were down about 0.2% and contracts on the Nasdaq 100 dipped 0.1%. Europe’s benchmark Stoxx 600 equity index edged 0.2% lower, with UK markets closed for a holiday.A renewed rise in oil prices complicates the outlook for interest rates as investors digest Federal Reserve Chairman Kevin Warsh’s hawkish inflation comments at Jackson Hole. Traders boosted bets on a September rate hike after he spoke, although some market commentators expressed skepticism about such a move.The two-year Treasury yield, which is the most sensitive to interest-rate changes, dropped three basis points in illiquid electronic trading, paring some of Friday’s jump after Warsh warned that inflation isn’t meaningfully slowing, and policymakers have “work to do.” The dollar edged lower against major peers after jumping the most in more than two months on Friday.“We expect the August CPI print to provide further evidence of disinflation,” Morgan Stanley analysts including Michael Gapen wrote in a note. “We think it will be enough to keep the Fed on hold, but it is a closer call now.”Meanwhile, Brent crude climbed 3.6%, rising above $91 a barrel. Washington and Tehran exchanged strikes for the first time in about a month, with US Central Command targeting rocket launchers preparing to send mines into the Strait of Hormuz. In response, the Islamic Revolutionary Guard Corps said that it had attacked US air bases in Jordan.Traders boosted bets to about 60% that the Fed will raise its benchmark rate when it meets next month from about 34% odds before Warsh spoke, according to swaps data compiled by Bloomberg.Warsh said financial conditions aren’t currently restrictive and described rates as the Fed’s “predominant tool” for achieving its mandate, while stopping short of signaling support for a hike in September.Warsh has re-established hawkish credibility at Jackson Hole with his unambiguous reference to inflation as the greater risk, Vishnu Varathan, head of macro strategy for Asia Pacific at Mizuho Securities in Singapore, wrote in a note.“But this is neither a commitment of imminent hikes in September-October, nor an inclination for sustained hiking cycle,” he said.Bond investors at firms including ABN Amro Investment Solutions and Brandywine Global Investment Management also voiced skepticism about mounting speculation that Warsh is poised to raise interest rates.Elsewhere, the yen strengthened 0.1% to 159.87 per dollar on Monday. Traders remain on alert to any stronger rhetoric from Japanese officials after the currency weakened on Friday to a one-month low following the dollar’s surge.Some of the main moves in markets:StocksS&P 500 futures fell 0.2% as of 6:08 a.m. New York time Nasdaq 100 futures fell 0.1% Futures on the Dow Jones Industrial Average fell 0.2% The Stoxx Europe 600 fell 0.2% The MSCI World Index was little changed CurrenciesThe Bloomberg Dollar Spot Index fell 0.1% The euro rose 0.1% to $1.1601 The British pound was little changed at $1.3545 The Japanese yen rose 0.2% to 159.74 per dollar CryptocurrenciesBitcoin fell 0.4% to $78,292.52 Ether fell 2% to $2,441.32 BondsThe yield on 10-year Treasuries was little changed at 4.72% Germany’s 10-year yield advanced three basis points to 3.31% Britain’s 10-year yield advanced three basis points to 5.06% CommoditiesWest Texas Intermediate crude rose 3.7% to $86.51 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.–With assistance from Winnie Hsu.©2026 Bloomberg L.P.
