US-Iran Tensions Push Asian Markets Lower Amid Rate Hike Uncertainty

Asian stock markets declined on Monday as oil prices rose and investors continued to assess the implications of fresh fighting between the United States and Iran. Brent futures climbed 1.4% to $89.38 a barrel after US forces struck two of Iran's launchers on its Larak island.

Federal Reserve Chair Kevin Warsh emphasized that more work remains to control inflation, keeping bond markets on edge. The probability of a September rate increase rose to 57%, with short-term Treasury yields sharply higher and the curve flattening.

Analysts are forecasting a bounce of 58,000 jobs in the August payrolls report, which would likely support the case for an early rate hike. However, a weaker outcome could temper this prospect.