Hormuz Tensions Fuel Inflation Fears as Oil Prices Soar
The global economy is facing rising inflation concerns due to renewed tensions in the Strait of Hormuz and higher oil prices. Iran has announced a shipping-management deal with Oman, but this has heightened concerns over its control of the chokepoint. The situation is fueling fears of supply disruptions, which could lead to higher prices for consumers.
Despite US markets being closed on Labor Day, European equities remained largely flat, while Asian markets traded mixed as semiconductor stocks rose despite a stronger yen weighing on demand. Japan's GDP grew 0.4% in Q2 2026, above expectations, and average cash earnings rose 4.7% year-over-year in August.
Copper prices have hit a record high due to tight supply and US tariff expectations, while Brent crude oil prices remain near $98 per barrel. European yields rebounded sharply as energy prices remained near cycle highs, with the benchmark German 2-year yield rising above 3.00% for the first time since 2024.