On Wednesday (2 September, 9:15 AM, GMT+7, Bangkok time), major indices in the Asia Pacific extended losses, mirroring a downward trend in U.S. equity markets, amid rising bond yields and higher oil prices. The selloff followed renewed geopolitical tensions, as the United States launched another series of strikes targeting Iran, raising anxiety among investors.
According to U.S. Central Command, the latest military actions were in response to recent attempted attacks by Iran’s Islamic Revolutionary Guard Corps on commercial shipping in the Strait of Hormuz and incidents involving American personnel. The U.K. Maritime Trade Operations Centre reported Monday that a tanker passing through the area was hit by unidentified projectiles.
The upswing in oil prices has intensified concerns about inflation, which is already being stoked by government spending and corporate borrowing aimed at supporting the expansion of AI initiatives. With U.S. markets now factoring in the possibility of a Federal Reserve rate hike in September, traders are monitoring energy and bond markets for additional signals of pressure on stocks.
Expectations for tighter U.S. monetary policy gained traction after Fed Chair Kevin Warsh emphasized vigilance over inflation during his remarks at Jackson Hole last week. As a result, the probability of an interest rate rise at the Fed’s September meeting stands at roughly 70%.
Japan’s NIKKEI lost 2.88% to 64,309.55. South Korea’s KOSPI slumped by 3.08% to 6,625.42, and Australia’s ASX 200 dropped by 1.12% to 8,965.20.
As for stocks in China, Shanghai’s SSEC declined by 0.90% to 3,943.88. Shenzhen’s SZI decreased by 1.66% to 13,641.49, and Hong Kong’s HSI contracted by 0.86% to 25,111.31.
The U.S. stock markets edged down on Tuesday as the Dow Jones Industrial Average (DJIA) fell by 0.79% to 52,766.88. NASDAQ plummeted by 1.03% to 26,099.77, and S&P 500 plunged by 0.71% to 7,631.47. VIX soared by 9.52% to 16.34.
As for commodities, oil prices settled higher on Tuesday after renewed conflict between the United States and Iran raised concerns about further supply interruptions from the Middle East. Brent crude ended the session up $4.16, gaining 4.6% to close at $94.65 per barrel. U.S. West Texas Intermediate (WTI) crude settled at $90.22 per barrel, rising $4.46 or 5.2%.
This morning, Brent futures gained $1.39, or 1.47%, to $96.04 per barrel, and the WTI futures jumped $1.12, or 1.24%, to $91.34 per barrel.
Meanwhile, gold futures dipped by 1.23% to $4,342.50 per Troy ounce.
