Global Markets Plummet Amid Fed Hike Expectations and Geopolitical Tensions

Global markets are experiencing a downturn due to expectations of an upcoming Federal Reserve rate hike and escalating geopolitical tensions in the Middle East. The rise in oil prices, driven by supply concerns amid renewed US-Iran military clashes, has pushed Brent crude above $90 per barrel.

The Fed's potential rate hike is also being fueled by growing concerns over inflationary pressures, which have led markets to price in a high certainty of an October rate increase. If the upcoming US nonfarm payrolls data comes in strong on Friday, this could further intensify rate hike expectations.

Russia's decision to extend its diesel export ban through September 30 has also contributed to concerns over refined fuel supplies, driving up oil prices and bond yields. The US Treasury Secretary Scott Bessent emphasized the importance of economic growth at the latest Finance Ministers and Central Bank Governors Meeting in Washington, DC.