The resumption of hostilities between the United States and Iran heightened concerns over energy supplies, pushing oil prices above $90 a barrel. Rising geopolitical risks prompted investors to move away from riskier assets and intensified selling pressure in global stock markets.
December Brent crude futures rose 3.6% to around $91.50 a barrel. US President Donald Trump's new threat to attack Iran and concerns that energy flows through the Strait of Hormuz could face prolonged disruption contributed to the rise in prices.
Trump said the United States would retaliate after Iran targeted US air bases in Jordan with ballistic missiles. Russia's decision to extend its diesel export ban until September 30 also heightened concerns over refined-fuel supplies.
Rate hike expectations strengthen
Concerns that higher oil prices could add to inflationary pressures strengthened expectations that the Federal Reserve will raise interest rates in October. Market pricing largely reflected expectations of an October rate hike, while a strong US nonfarm payrolls report could further reinforce those expectations.
Comments from Federal Reserve officials also influenced market expectations for interest rates. US Treasury Secretary Scott Bessent said at the G20 Finance Ministers and Central Bank Governors Meeting that economic growth was the G20's top priority.
Fed Chair Kevin Warsh said during a session on growth that inflation and growth were a matter of choice, adding that economic growth in the United States appeared to have strengthened. Warsh said they would address questions related to capital spending and productivity.
Speaking during a banking session, Warsh also highlighted the broad range of lending institutions in the United States and the depth of its financial markets. Emphasizing the importance of a safe, sound and competitive banking system, Warsh said they would remain focused on reform.
Bond yields rise
Amid rising oil prices and expectations of a rate hike, the yield on the US 10-year Treasury rose to 4.79%, its highest level since January 2025. The dollar index rose 0.1% to 99.5, while gold fell 0.5% to $4,430 an ounce.
New York stocks decline
US stocks ended the first trading day of the week lower as geopolitical tensions weighed on markets. The Dow Jones fell 0.7%, the S&P 500 declined 0.33% and the Nasdaq lost 0.12%.
US stock-index futures opened the new day mixed.
European markets face selling pressure
European stocks closed lower on the first trading day of the week as selling pressure in bond markets and Iran-related geopolitical tensions heightened inflation concerns. Germany's 10-year bond yield rose to 3.32%, its highest level in 15 years, amid concerns over the rise of the far right.
The London Stock Exchange was closed for a public holiday. Rising financing costs across Europe created selling pressure, particularly on real estate and technology stocks.
Germany's consumer price index rose 0.2% month on month and 2.9% year on year in August. The data came in slightly above expectations.
France's CAC 40 fell 0.79%, Germany's DAX 40 declined 1.17% and Italy's FTSE MIB 30 lost 0.01%. European stock-index futures also opened lower.
Asian stocks mostly decline
Asian markets were dominated by selling as geopolitical risks, rising oil prices and higher bond yields weighed on sentiment.
Japan's 10-year bond yield reached 3% for the first time since 1996 after reports that Scott Bessent wanted the Bank of Japan to raise interest rates more aggressively.
China's RatingDog manufacturing PMI rose to 51.5 in August from 50.9. While the data indicated that demand in the manufacturing sector remained resilient, concerns over domestic demand and cost pressures stemming from geopolitical risks persisted.
South Korea's exports rose 68.7% year on year in August, exceeding expectations. The data showed that global demand, particularly for technology products, remained strong.
Near the close, South Korea's Kospi fell 0.1%, Japan's Nikkei 225 declined 0.1% and Hong Kong's Hang Seng dropped 1%. China's Shanghai Composite traded flat.
Borsa Istanbul closes lower
The BIST 100 index ended the previous trading session down 2.10% at 14,334.06 points amid heavy selling. The August contract based on the BIST 30 index on Borsa Istanbul's Futures and Options Market also fell 1.2%.
Dollar/Turkish lira trading ended the previous day flat at 48.2560, while the pair traded at 48.2770 at the opening of the interbank market.
In Türkiye, markets will follow the manufacturing Purchasing Managers' Index data. Internationally, investors will monitor US JOLTS job openings, global manufacturing PMI data and eurozone inflation. Technical assessments identified 14,200 and 14,100 points as support levels for the BIST 100 index, and 14,400 and 14,500 points as resistance levels.
Data to watch
- 10:00 — Türkiye's August manufacturing PMI
- 10:55 — Germany's August manufacturing PMI
- 11:00 — Eurozone August manufacturing PMI
- 11:30 — United Kingdom's August manufacturing PMI
- 12:00 — Eurozone August consumer price index and July unemployment rate
- 16:45 — US August manufacturing PMI
- 17:00 — US August ISM manufacturing PMI and July JOLTS job openings
