Hormuz Tanker Attacks Lift Oil, Global Bond Selloff Deepens, Japan Yield Tops 3%, Gold Drops Below $4,400

Reports said two supertankers were hit by projectiles in the Strait of Hormuz, sharply escalating geopolitical risks and driving international oil prices higher for a second day. Meanwhile, spot gold fell below $4,400 an ounce, spot silver's intraday loss widened to 1%, and U.S. stock futures declined. The global bond market extended its selloff, with sovereign yields in major economies climbing to multi-decade highs.

On Tuesday, S&P 500 futures fell 0.3% and Nasdaq 100 futures dropped 0.7%. In oil markets, Brent rose 1.9% to $92.24 a barrel as a fresh exchange of fire between the U.S. and Iran heightened concerns about disruption to energy flows through the Strait of Hormuz and reinforced inflation expectations. Spot gold broke below $4,400 an ounce to trade at $4,399.45, down more than 1% on the day.

In bonds, the 10-year U.S. Treasury yield climbed to 4.78%, the highest since January 2025; Japan's 10-year yield touched 3% for the first time in 30 years, and Australia's 10-year yield rose to its highest since 2011. The Bloomberg Global Government Bond Index yield advanced for a fourth straight session to 3.72%, the highest since mid-2008. Market-implied odds of a Federal Reserve rate cut in September jumped to 65% from 34% before Fed Chair Powell's Jackson Hole speech last Friday.

Pepperstone Group strategist Dilin Wu wrote in a research note, "The policy paths of major global central banks will be revealed one by one within the same month, creating a highly concentrated pricing window for rates and FX markets. If central banks broadly shift toward tightening, this will pressure non-yielding gold and high-valuation risk assets."

• S&P 500 futures fell 0.3%, Nasdaq 100 futures dropped 0.7%.
• European stocks opened mixed: Germany's DAX fell 0.39%, the UK's FTSE 100 slipped 0.35%, France's CAC 40 rose 0.19%, and the Euro Stoxx 50 edged down 0.06%.
• South Korea's Kospi declined 0.13%. Japan's Topix rose 0.5%. The Nikkei 225 fell 0.4% under pressure.
• Taiwan's Taiex closed up 1.8% at 46,948.72.
• The dollar spot index was little changed. The yen traded near 160 per dollar.
• The 10-year U.S. Treasury yield rose 3 basis points to 4.78%.
• Japan's 10-year yield touched 3% for the first time in 30 years, and Australia's 10-year yield rose to its highest since 2011.
• Oil prices advanced, with Brent up 1.9% to $92.24 a barrel.
• Spot gold broke below $4,400 an ounce to trade at $4,399.45, down more than 1% on the day.
• Spot silver fell 1% to $65.86 an ounce.
• Bitcoin slipped 0.2% to $78,721.01.

Bond Market Under Multiple Pressures, Long-End Yields Hit Yearly Highs

Large government fiscal deficits, rising inflation expectations, and a surge in corporate debt issuance are the core drivers of the current global bond selloff.

The 30-year U.S. Treasury yield stood at 5.27% on Monday, and the number of trading days this year with yields above 5% has reached 55, the most for the same period since 2006. The yield touched a high of 5.34% in mid-August, the highest since 2007 and just 10 basis points below its 22-year peak.

Bloomberg Markets Live strategist Mark Cranfield noted, "G10 fixed-income traders are watching JGB moves more closely, and Australian bonds are increasingly following JGBs rather than Treasuries. The near-term environment is very unfavorable: the U.S., Japan, the UK, and France all face the twin pressures of sticky inflation and widening fiscal deficits."

Idanna Appio, portfolio manager and senior research analyst at First Eagle Investments, said in a Bloomberg Television interview, "Investors are starting to reassess the level of the neutral policy rate, which has been gradually rising." She added that fixed-income markets face a severe supply-demand imbalance: "Bond supply from the U.S. corporate sector is already very large, and expected supply related to mega-cap tech companies will add further."

Central Banks Meet in September, Rate-Hike Expectations Heat Up

September will be a key window for global central bank policy decisions, with interest-rate swap markets showing hike probabilities above 50% for several major central banks.

According to Bloomberg data, markets have fully priced in a European Central Bank rate hike at its September 10 meeting; the Reserve Bank of Australia has a 54% probability of hiking on September 29; the Bank of Japan has a 92% probability of hiking on September 18; and the Reserve Bank of New Zealand has a 98% probability of hiking this week.

In currencies, the yen traded near 160 per dollar, fueling intense focus on whether authorities will intervene again. The yen has retraced more than half of the gains recovered during the record intervention since late July. BNY Asia-Pacific macro strategist Wee Khoon Chong said in a report, "Rising global yields, elevated oil prices, and a firm dollar are hindering a broader recovery in risk sentiment."

U.S.-Iran Conflict Escalates, Hormuz Risk Reignites

Oil prices rose for a second consecutive session, driven mainly by the latest military clash between the U.S. and Iran, the second exchange of fire in about a month.

After U.S. forces struck an island near the Strait of Hormuz, Iran retaliated with attacks on the UAE and Jordan. Iranian missiles were intercepted and shot down before causing damage, according to local media. Trump later said in a Fox News interview that the U.S. would respond to attacks on American forces, raising concerns that the conflict could enter a new cycle of escalation. Trump characterized the conflict as "a relatively small war for us" and dismissed worries that it was draining U.S. military strength.

Bart Melek, global head of commodity strategy at TD Securities, said, "Traders net reduced crude positions last week due to uncertainty over the next phase of the Iran conflict. We still expect crude prices to move higher because there is no sign that normal transit through the Strait of Hormuz will resume anytime soon."

According to Bloomberg, citing people familiar with the matter, Abu Dhabi National Oil Company has restored the Ruwais refinery, damaged earlier in the war, to full capacity, and the facility has been running stably for about a month, boosting diesel and jet fuel exports. However, Gulf producers including the UAE, Saudi Arabia, and Kuwait continue to mitigate risk by turning off ship transponders while maintaining some crude exports, and the security situation in the strait remains severe—the UK Maritime Trade Operations (UKMTO) reported that a tanker was struck by three projectiles while outbound through the Strait of Hormuz.

MediaTek Surges Limit-Up, Asia-Pacific Stocks Mixed

Asia-Pacific equities were mixed. The MSCI Asia Pacific Index edged up 0.3%, with Taiwan stocks leading gains.

Wall Street News noted that MediaTek announced on Monday the completion of a $3.9 billion U.S. dollar-denominated convertible bond offering, with Nvidia subscribing to $3.5 billion of it. Alphabet and other investors also participated, though specific amounts were not disclosed.

Nvidia's move marks its largest direct investment outside the U.S. to date, widely interpreted as strategic endorsement of MediaTek's AI semiconductor transformation. Francis Tan, chief strategist at Indosuez Wealth Management in Singapore, said: "This investment is a major strategic vote of confidence for MediaTek, further strengthening its transition from being known mainly for smartphone chips to a broader AI semiconductor company." MediaTek CEO Rick Tsai said that with Nvidia's stake, the company's AI chip business is expected to accelerate growth.

MediaTek has set a revenue target of $2 billion for its custom AI chip business this year and aims to capture 15% of an $80 billion market by 2027. Earlier this year, MediaTek partnered with Alphabet's Google, and some analysts speculate SpaceX could be its next AI customer.

Japan's Topix rose 0.5%. The Nikkei 225 fell 0.4% under pressure.