Escalating tensions between the United States and Iran, concerns over energy supplies and shifting interest-rate expectations once again became key drivers of global asset pricing. As Brent crude approached $100 a barrel, bond yields rose and equity markets presented a mixed picture.
An unidentified senior U.S. official told Fox News that the U.S. military had targeted several sites on Iran's Kharg Island and in the city of Jask. News about Kharg Island, a central hub for Iran's oil exports, and other strategic locations heightened concerns about energy supplies.
Oil prices and interest-rate expectations
As geopolitical risks intensified concerns over energy supplies, the price of November Brent crude futures rose 1% in the previous trading session to $97.9 a barrel. The price rose a further 1.2% in the new trading session to around $99.1.
Rising oil prices fueled concerns about persistent global inflation. Expectations that central banks could adopt a more hawkish stance in response to inflationary pressures increased selling pressure in bond markets.
The yield on the U.S. 10-year Treasury note rose to 4.82%, approaching its highest level since November 2023. In money markets, the probability of the Federal Reserve raising its policy rate by 25 basis points at next week's meeting stood at 60%, while expectations for another rate hike by the end of the year remained in place.
Inflation data due to be released in the United States on Friday is expected to provide fresh clues about the Federal Reserve's potential monetary policy move. Consumers' short-term inflation expectations remained unchanged at 3.6% in August. Consumer credit rose by $18.1 billion in July, exceeding expectations.
AI optimism supports technology stocks
While risks to energy supplies and interest-rate expectations weighed on markets, optimism in the artificial intelligence sector continued. New developments and positive assessments of the capabilities of next-generation language models supported expectations of higher demand for computing power and chips.
Demand was considered to remain strong for data center operators, network equipment manufacturers and other infrastructure companies, as well as chip and memory producers. As optimism over artificial intelligence strengthened, investment flows that had shifted toward traditional sectors such as industry in previous months began turning in favor of technology and semiconductor stocks.
Mixed picture in U.S. and European markets
Under the influence of rising rate expectations and geopolitical risks, the S&P 500 fell 0.58%, the Nasdaq declined 0.32% and the Dow Jones dropped 1.18%. U.S. index futures opened mixed in the new session.
The dollar index stood at 98.7, little changed, while gold fell 1.2% in the previous trading session to $4,355 an ounce. Gold rose 0.6% in the new trading session to $4,382.
In European equity markets, the impact of tensions in the Middle East on energy supplies and ongoing inflation risks came to the fore. The European Central Bank is expected to raise all three of its key interest rates by 25 basis points, while President Christine Lagarde's remarks will be watched for indications about the market's direction.
The euro gained 0.1% against the dollar ahead of the expected rate hike, rising to 1.1630. Germany's exports fell 0.8% month on month in July, while technical problems affecting air traffic control services in the United Kingdom caused flight disruptions at major airports.
France called for more than €60 billion in revenue from new taxes to be imposed across the European Union to finance the bloc's next seven-year budget. The FTSE 100 in the United Kingdom and Italy's FTSE MIB fell 0.1%, while France's CAC 40 rose 0.14%. Germany's DAX 40 was little changed, and European index futures opened lower.
China data in focus in Asian markets
Asian equity markets traded mixed as China's August inflation data was released. The Consumer Price Index rose 0.8% year on year, while the Producer Price Index increased 3.8% year on year.
Attacks in the Middle East increased risks to oil supplies and raised risk perceptions in regional markets. Continued investor demand for the semiconductor sector provided support for markets.
The yen continued to appreciate amid hawkish expectations regarding the Bank of Japan and intervention by the Japanese government. The dollar-yen exchange rate fell 0.4% to 153.3. South Korea's Kospi rose 1.1%, while Japan's Nikkei 225 fell 0.3% and Hong Kong's Hang Seng declined 0.5%; the Shanghai Composite was unchanged.
Borsa Istanbul rises
The BIST 100 index on Borsa Istanbul ended the previous trading session up 1.79% at 14,405.25 points. The October contract based on the BIST 30 index on Borsa Istanbul's Futures and Options Market fell 0.57% in the evening session compared with the regular-session close.
The Capital Markets Board set the threshold for shareholding notifications in the capital of publicly traded issuers at 3%, effective at the end of the trading day on September 11, 2026. Tables showing individuals and legal entities with a direct stake of 3% or more, as well as individuals and legal entities with an indirect stake of 10% or more, including free funds, will be updated instantly by the Central Securities Depository.
The dollar/Turkish lira exchange rate closed the previous day at 48.4600 and opened the new session at 48.4740 in the interbank market. Technically, 14,500 and 14,600 points are being monitored as resistance levels for the BIST 100 index, while 14,300 and 14,200 points are seen as support levels.
Data to watch in the markets
- 09:00: Japan's annual machinery orders for August
- 14:00: U.S. weekly mortgage applications
