US-Iran Tensions Send Oil Prices Soaring, Fueling Rate Hike Fears

Global stock markets are bracing for a cautious end to August as tensions between the US and Iran escalate, pushing oil prices higher. Brent oil futures surged above $90 a barrel after a US strike on Iranian launchers on Sunday.

The heightened risk of inflation and interest rate increases from major central banks is weighing on investor sentiment, with the probability of a September Fed rate hike jumping to 57%. Short-term Treasury yields have spiked sharply higher, flattening the yield curve.

In Asia, Japan's Nikkei slipped 0.1%, while MSCI's world stock index was marginally lower. Chinese blue chips recovered from early losses, but property developers remained under pressure after Beijing announced regulatory changes.