Brent crude tops $95 on US-Iran strikes, and the bond rout does the rest of the damage

US and Iranian forces exchanged strikes over September 1 and 2, pushing Brent crude above $95 a barrel by the morning of September 2. Note the benchmark: this is Brent, while WTI sat closer to $90, so the headline level is not a blanket oil price. On the preceding session, US equities closed lower across the board, with the S&P 500 down 0.71%, the Dow down 0.79% or 419 points to 52,766.88, and the Nasdaq down 1.03% as technology shares led the decline and crude rallied 5% on the day .

The bond market is doing more of the work than the equity tape suggests. Reuters reported the sell-off deepening as the oil move landed on top of existing anxiety about public debt, with the 10-year Treasury yield reaching 4.81% on September 2, near a three-year high. That is the mechanism worth watching: an energy shock that raises the inflation path also raises the discount rate applied to every risk asset, so equities take damage twice.

The shock is travelling through import-dependent markets first. Pakistan's KSE-100 shed 1,250 points amid the escalation, and Indian auto stocks fell 3.24% as higher crude costs hit a sector that passes fuel prices through to demand almost immediately. Gulf exchanges have been mixed to lower rather than uniformly down, with Saudi Arabia's Tadawul off 0.2%, Abu Dhabi off 0.3%, Dubai roughly flat and Qatar up 0.5% in the September 2 session.

What would change the picture is supply rather than sentiment. Traders are pricing risk to flows through the Strait of Hormuz, not an actual interruption, so the next repricing depends on whether shipments are disrupted, whether sanctions widen, and whether OPEC producers signal spare capacity. Until one of those resolves, the pairing of a rising oil price with rising long-dated yields is the combination that keeps equity valuations under pressure.

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