On Tuesday (1 September, 9:13 AM, GMT+7, Bangkok time), major indices in the Asia Pacific declined in response to an uptick in oil prices amid escalating instability in the Middle East. The increase in energy costs has heightened concerns about inflation and prompted expectations of further policy tightening, while regional bonds mirrored the decline seen in U.S. Treasuries.
Investor sentiment took a hit after President Donald Trump reportedly warned of possible additional military action against Iran. This follows missile strikes by Iran targeting two American military bases in Jordan, which were launched in retaliation for a prior U.S. operation against Larak Island.
According to information cited by Axios, Trump and his advisors are also evaluating the possibility of targeted action around the Strait of Hormuz, aiming to deter Iranian threats to maritime navigation.
The recent rise in tension has clouded the outlook for restoring normal shipping activity through the Strait of Hormuz, sustaining higher oil prices and reinforcing inflationary pressures. This environment has led money markets to increase the probability of a rate hike as soon as September, especially after Federal Reserve Chair Kevin Warsh reaffirmed at Jackson Hole last week that he remains focused on curbing inflation.
Market participants are also turning their attention to the U.S. employment data set to be released on Friday, with economist estimates indicating a gain of 53,000 jobs for August.
Japan’s NIKKEI fell by 0.24% to 66,155.29. South Korea’s KOSPI dropped by 0.27% to 6,801.80, and Australia’s ASX 200 decreased by 0.46% to 9,034.50.
As for stocks in China, Shanghai’s SSEC slid by 0.05% to 3,984.41. Shenzhen’s SZI contracted by 0.86% to 13,894.06, and Hong Kong’s HSI plunged by 0.98% to 25,316.56.
The U.S. stock markets edged down on Monday as the Dow Jones Industrial Average (DJIA) lost 0.70% to 53,185.90. NASDAQ dipped by 0.12% to 26,370.88, and S&P 500 shrank by 0.33% to 7,686.14. VIX jumped by 3.40% to 14.92.
As for commodities, oil prices settled higher on Monday as renewed military conflict involving the United States and Iran heightened investor worries about potential interruptions to oil supplies. Brent crude ended the session $2.39 higher, advancing 2.71% to close at $90.49 per barrel. U.S. West Texas Intermediate crude increased by $2.36, or 2.83%, settling at $85.76 per barrel.
This morning, Brent futures surged 47 cents, or 0.52%, to $90.96 per barrel, and the WTI futures rose 66 cents, or 0.77%, to $86.42 per barrel.
Meanwhile, gold futures climbed by 0.25% to $4,492.70 per Troy ounce.
