Global Bond Sell-Off Intensified as Inflation Risks Weigh On Sentiment

The U.S. stock market suffered major losses as escalating hostilities between the U.S. and Iran severely damaged investor sentiment. 

The S&P 500 Index decreased 0.2%, and the tech-focused Nasdaq Composite declined 0.6% as investors turned cautious amid rising global bond yields. 

On Tuesday, major U.S. stock indexes ended a third consecutive session in the red as persistent macroeconomic headwinds dampened investor sentiment.

The tech-heavy Nasdaq Composite fell over 1%, while the S&P 500 and Dow Jones Industrial Average decreased 0.7% and 0.8%, respectively, leading to a volatile start for the month of September.

A widespread sell-off in sovereign debt extended the recent rise in government bond yields upward across the U.S., Europe, and Asia. 

Yields have been advancing on fears a prolonged rise in oil prices could broaden inflationary pressures and stoke higher wage inflation.  

The U.S. 10-year Treasury yield surpassed 4.82%, tracking toward its highest level since November 2023 as global market participants adjust to the prospect of prolonged high borrowing costs.

The global bond market remained under pressure amid a worry that central banks need to tighten monetary policy. 

Bond yields in the U.S. approached the peak levels reached in late 2023, in Europe advanced to 18-year highs, and in Japan reached levels not seen in three decades.  

Over a 25-year timeline (2001–2026), the US 10-year yield chart displays a massive structural shift, and yields fluctuated between 3% and 5% following the dot-com bubble crash and subsequent economic recovery before heading lower during the onset of the 2008 financial crisis.

In March 2020, as COVID-19 shook global markets, the 10-year yield touched an all-time historic low of roughly 0.54%.

As inflation surged post-pandemic, the Federal Reserve aggressively hiked interest rates, following several stimulus measures totaling approximately 12% of the U.S. GDP.

Yields climbed sharply out of the historic lows, breaking past 4% in late 2022 and reaching peaks near 5% in late 2023 and mid-2026 due to ongoing inflation and oil price pressures

International energy markets experienced a sharp upward surge following the sustained military exchanges between the United States and Iran near the Strait of Hormuz over the last three days.

Brent crude climbed to $94.80 a barrel, and West Texas Intermediate rose to $90.20, expanding concerns that prolonged conflict could trigger wider supply disruptions and stoke inflationary pressures. 

U.S. Movers 

Dell Technologies jumped 9% to $463.02 after the computer maker lifted its annual revenue estimate and better-than-expected fiscal second-quarter results ending in July. 

Revenue increased 58% to $46.9 billion from $29.8 billion, net income advanced 255% to $4.1 billion from $1.2 billion, and diluted earnings per share soared 273% to $6.34 from $1.70 a year ago. 

Dell Technologies returned a record $4.3 billion to shareholders in the second quarter through share repurchases and dividends. 

In addition, the company's board of directors declared a quarterly dividend of 63 cents per share payable on October 30 to shareholders on record on October 20. 

The company revised its full-year fiscal 2027 revenue to $192 billion, an increase of 69%; and its earnings per share estimate to $24.37, an increase of 181% from a year ago, respectively.   

The company previously estimated full-year fiscal 2027 revenue of $167 billion. 

MongoDB dropped 13% to $374.22 despite the database company reporting strong results in its fiscal second quarter and raising its outlook. 

Revenue increased 30% to $771.8 million from $591.4 million, net income swung to a profit of $40.9 million from a loss of $47.1 million, and diluted earnings per share swung to an income of 50 cents from a loss of 58 cents. 

The company estimated third-quarter revenue to range between $756 million and $761 million and net income per share to fall between breakeven and 5 cents. 

For the full year, the company estimated revenue to range between $2.99 billion and $3.03 billion, and net income to fall between 53 cents and 77 cents. 

Global Bond Sell-Off Deepens as Inflation Risks W

The U.S. stock market suffered major losses as escalating hostilities between the U.S. and Iran severely damaged investor sentiment. 

The S&P 500 Index decreased 0.2%, and the tech-focused Nasdaq Composite declined 0.6% as investors turned cautious amid rising global bond yields. 

On Tuesday, major U.S. stock indexes ended a third consecutive session in the red as persistent macroeconomic headwinds dampened investor sentiment.

The tech-heavy Nasdaq Composite fell over 1%, while the S&P 500 and Dow Jones Industrial Average decreased 0.7% and 0.8%, respectively, leading to a volatile start for the month of September.

A widespread sell-off in sovereign debt extended the recent rise in government bond yields upward across the U.S., Europe, and Asia. 

Yields have been advancing on fears a prolonged rise in oil prices could broaden inflationary pressures and stoke higher wage inflation.  

The U.S. 10-year Treasury yield surpassed 4.82%, tracking toward its highest level since November 2023 as global market participants adjust to the prospect of prolonged high borrowing costs.

The global bond market remained under pressure amid a worry that central banks need to tighten monetary policy. 

Bond yields in the U.S. approached the peak levels reached in late 2023, in Europe advanced to 18-year highs, and in Japan reached levels not seen in three decades.  

Over a 25-year timeline (2001–2026), the US 10-year yield chart displays a massive structural shift, and yields fluctuated between 3% and 5% following the dot-com bubble crash and subsequent economic recovery before heading lower during the onset of the 2008 financial crisis.

In March 2020, as COVID-19 shook global markets, the 10-year yield touched an all-time historic low of roughly 0.54%.

As inflation surged post-pandemic, the Federal Reserve aggressively hiked interest rates, following several stimulus measures totaling approximately 12% of the U.S. GDP.

Yields climbed sharply out of the historic lows, breaking past 4% in late 2022 and reaching peaks near 5% in late 2023 and mid-2026 due to ongoing inflation and oil price pressures

International energy markets experienced a sharp upward surge following the sustained military exchanges between the United States and Iran near the Strait of Hormuz over the last three days.

Brent crude climbed to $94.80 a barrel, and West Texas Intermediate rose to $90.20, expanding concerns that prolonged conflict could trigger wider supply disruptions and stoke inflationary pressures. 

U.S. Movers 

Dell Technologies jumped 9% to $463.02 after the computer maker lifted its annual revenue estimate and better-than-expected fiscal second-quarter results ending in July. 

Revenue increased 58% to $46.9 billion from $29.8 billion, net income advanced 255% to $4.1 billion from $1.2 billion, and diluted earnings per share soared 273% to $6.34 from $1.70 a year ago. 

Dell Technologies returned a record $4.3 billion to shareholders in the second quarter through share repurchases and dividends. 

In addition, the company's board of directors declared a quarterly dividend of 63 cents per share payable on October 30 to shareholders on record on October 20. 

The company revised its full-year fiscal 2027 revenue to $192 billion, an increase of 69%; and its earnings per share estimate to $24.37, an increase of 181% from a year ago, respectively.   

The company previously estimated full-year fiscal 2027 revenue of $167 billion. 

MongoDB dropped 13% to $374.22 despite the database company reporting strong results in its fiscal second quarter and raising its outlook. 

Revenue increased 30% to $771.8 million from $591.4 million, net income swung to a profit of $40.9 million from a loss of $47.1 million, and diluted earnings per share swung to an income of 50 cents from a loss of 58 cents. 

The company estimated third-quarter revenue to range between $756 million and $761 million and net income per share to fall between breakeven and 5 cents. 

For the full year, the company estimated revenue to range between $2.99 billion and $3.03 billion, and net income to fall between 53 cents and 77 cents. 

Surging Bond Yields and Oil Prices Weighed On Japan's Equities

Japan's indexes declined for the second consecutive session amid rising global bond yields. 

The Nikkei 225 Stock Average decreased nearly 3%, the broader TOPIX fell more than 2%, and the yen weakened to 160.09 against the U.S. dollar. 

The yield on 10-year Treasury notes advanced to 4.80%, touching its highest mark since early 2025, driven by hawkish comments from the Fed Chair Warsh and fears of resurgent inflation.   

The yields on similar-dated maturities of the Japanese government bond advanced to a three-decade high of 3.01%, the UK government jumped to an 18-year high of 5.2%, the German government bond increased to a 16-year high of 3.36%, and the French government OAT rose to an 18-year high of 4.20%. 

The Brent crude oil price advanced 0.8% to $95.34 per barrel, and advanced for the third day in a row, amid renewed hostilities in the Strait of Hormuz and escalating tensions in the Middle East. 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average decreased 2.9% to 64,277.98, and the TOPIX dropped 2.3% to 4,085.71. 

Tokyo Electron decreased 3.8% to ¥52,900.0, Advantest Corp. declined 3% to ¥32,390.0, Kioxia Holding edged up 0.3% to ¥51,170.0, and Fujikura Holdings fell 3.5% to ¥5,106.0. 

Surging Bond Yields and Oil Prices Weighed On Japan's Equities

Japan's indexes declined for the second consecutive session amid rising global bond yields. 

The Nikkei 225 Stock Average decreased nearly 3%, the broader TOPIX fell more than 2%, and the yen weakened to 160.09 against the U.S. dollar. 

The yield on 10-year Treasury notes advanced to 4.80%, touching its highest mark since early 2025, driven by hawkish comments from the Fed Chair Warsh and fears of resurgent inflation.   

The yields on similar-dated maturities of the Japanese government bond advanced to a three-decade high of 3.01%, the UK government jumped to an 18-year high of 5.2%, the German government bond increased to a 16-year high of 3.36%, and the French government OAT rose to an 18-year high of 4.20%. 

The Brent crude oil price advanced 0.8% to $95.34 per barrel, and advanced for the third day in a row, amid renewed hostilities in the Strait of Hormuz and escalating tensions in the Middle East. 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average decreased 2.9% to 64,277.98, and the TOPIX dropped 2.3% to 4,085.71. 

Tokyo Electron decreased 3.8% to ¥52,900.0, Advantest Corp. declined 3% to ¥32,390.0, Kioxia Holding edged up 0.3% to ¥51,170.0, and Fujikura Holdings fell 3.5% to ¥5,106.0. 

China's Indexes Trade Down Amid Asia-wide Decline, Shein Recovers After Early Fall On HK Debut

China's indexes headed lower as global bond yields continued to rise, and a renewed surge in crude oil prices dampened investor appetite. 

The Hang Seng Index decreased 1.4%, and the mainland-focused CSI 300 Index fell 1.5% amid a broad selloff across Asia. 

Escalating tensions in the Middle East are stoking concerns over potential prolonged supply disruptions, adding to global inflationary pressures and supporting the case for major central banks to pursue tighter monetary policy for longer.  

The yield on 10-year Treasury notes advanced to 4.80%, touching its highest mark since early 2025, driven by hawkish comments from the Fed Chair Warsh and fears of resurgent inflation.   

The yields on similar-dated maturities of the Japanese government bond advanced to a three-decade high of 3.01%, the UK government jumped to an 18-year high of 5.2%, the German government bond increased to a 16-year high of 3.36%, and the French government OAT rose to an 18-year high of 4.20%. 

However, the yield on 10-year China's government bonds hovered near the multi-year low of 1.68%, as investors debated the growth outlook following the release of industrial profit, fixed-asset investment, retail sales, jobless rate, and new home sales data. 

Investor mood turned cautious after policymakers failed to make announcements following the 4-day 14th National People's Congress Standing Committee meeting on Friday. 

The latest string of macroeconomic data confirmed that economic momentum is slowing; China's GDP growth in 2026 could fall short of the government's target between 4.5% and 5.0%. 

Despite rising export activities, the weakness in domestic demand continued to dampen overall factory activities in the private and public sectors.  

China Indexes and Stocks 

The Hang Seng Index decreased 1.4% to 25,031.0, and the mainland-focused CSI 300 Index declined 1.5% to 4,541.60. 

Sino Land Co. Ltd. increased 1.1% to HK $10.38 after the company, which develops property in Hong Kong, reported its financial results. 

Sino Land Company Limited reported a 14.2% increase in net profit attributable to shareholders to HK$4.59 billion for the financial year ending in June, driven by a 13.3% rise in revenue to HK$9.3 billion compared to HK$8.2 billion in the previous year.

Underlying profit declined 6.4% to HK$4.8 billion, driven by a sharp fall in losses from the revaluation of investment properties to HK$192 million from HK$1.1 billion.

The losses linked to the revaluation of investment properties narrowed to HK$192 million from HK$1.1 billion a year ago. 

Stock declined in early trading on Tuesday to HK $44 before recovering later in the day; it closed nearly unchanged at HK $48.45. 

In today's trading, Shein decreased 2.8% to HK $47.14. 

China-based fast-fashion company Shein raised $1.7 billion and listed its shares on the Hong Kong Stock Exchange. 

The casual-fashion platform operator sold 280 million shares at HK $48.56 each, and the company plans to use proceeds to strengthen technology infrastructure and raise brand awareness. 

The debut follows years of stalled efforts to list in New York and London due to regulatory hurdles from U.S. scrutiny and Beijing.    

China's Indexes Trade Down Amid Asia-wide Sell-Off, Shein Shares Recover After Early Fall On HK Debut

China's indexes headed lower as global bond yields continued to rise, and a renewed surge in crude oil prices dampened investor appetite. 

The Hang Seng Index decreased 1.4%, and the mainland-focused CSI 300 Index fell 1.5% amid a broad selloff across Asia. 

Escalating tensions in the Middle East are stoking concerns over potential prolonged supply disruptions, adding to global inflationary pressures and supporting the case for major central banks to pursue tighter monetary policy for longer.  

The yield on 10-year Treasury notes advanced to 4.80%, touching its highest mark since early 2025, driven by hawkish comments from the Fed Chair Warsh and fears of resurgent inflation.   

The yields on similar-dated maturities of the Japanese government bond advanced to a three-decade high of 3.01%, the UK government jumped to an 18-year high of 5.2%, the German government bond increased to a 16-year high of 3.36%, and the French government OAT rose to an 18-year high of 4.20%. 

However, the yield on 10-year China's government bonds hovered near the multi-year low of 1.68%, as investors debated the growth outlook following the release of industrial profit, fixed-asset investment, retail sales, jobless rate, and new home sales data. 

Investor mood turned cautious after policymakers failed to make announcements following the 4-day 14th National People's Congress Standing Committee meeting on Friday. 

The latest string of macroeconomic data confirmed that economic momentum is slowing; China's GDP growth in 2026 could fall short of the government's target between 4.5% and 5.0%. 

Despite rising export activities, the weakness in domestic demand continued to dampen overall factory activities in the private and public sectors.  

China Indexes and Stocks 

The Hang Seng Index decreased 1.4% to 25,031.0, and the mainland-focused CSI 300 Index declined 1.5% to 4,541.60. 

Sino Land Co. Ltd. increased 1.1% to HK $10.38 after the company, which develops property in Hong Kong, reported its financial results. 

Sino Land Company Limited reported a 14.2% increase in net profit attributable to shareholders to HK$4.59 billion for the financial year ending in June, driven by a 13.3% rise in revenue to HK$9.3 billion compared to HK$8.2 billion in the previous year.

Underlying profit declined 6.4% to HK$4.8 billion, driven by a sharp fall in losses from the revaluation of investment properties to HK$192 million from HK$1.1 billion.

The losses linked to the revaluation of investment properties narrowed to HK$192 million from HK$1.1 billion a year ago. 

Stock declined in early trading on Tuesday to HK $44 before recovering later in the day; it closed nearly unchanged at HK $48.45. 

In today's trading, Shein decreased 2.8% to HK $47.14. 

China-based fast-fashion company Shein raised $1.7 billion and listed its shares on the Hong Kong Stock Exchange. 

The casual-fashion platform operator sold 280 million shares at HK $48.56 each, and the company plans to use proceeds to strengthen technology infrastructure and raise brand awareness. 

The debut follows years of stalled efforts to list in New York and London due to regulatory hurdles from U.S. scrutiny and Beijing.    

Rising U.S. and Global Bond Yields Broadsided Risk Appetite

Benchmark indexes struggled to advance on Tuesday after a losing session, despite closing out August with net monthly gains. 

The S&P 500 Index decreased 0.5%, and the tech-focused Nasdaq Composite fell 1% as global bond yields hit multi-decade highs. 

Fresh military exchanges between the U.S. and Iran over the weekend have muted risk appetite and amplified general market volatility.  

Crude oil prices advanced for the second session in a row, and the West Texas Intermediate price per barrel advanced 2.2% to $87.72 and the Brent crude oil price increased 1.7% to $92.04. 

The yield on 10-year Treasury notes advanced to 4.78%, touching its highest mark since early 2025, driven by hawkish comments from the Fed Chair Warsh and fears of resurgent inflation.   

The yields on similar-dated maturities of the Japanese government bond advanced to a three-decade high of 3%, the UK government jumped to a 18-year high 5.2%, German government bund increased to a 16-year high of 3.36%, and French government OAT rose to a 18-year high of 4.15%. 

Benchmark indexes advanced in August, and the S&P 500 index gained 2.6%, and the Nasdaq Composite jumped 3.9%, despite rising tensions in the Middle East and bond yields advancing to multi-year highs.

Investors are looking ahead to the release of August's jobs report, and the U.S. economy is likely to add net job gains of less than 25,000. Moreover, June's job gains could be revised lower from 20,000, and July's net loss of 23,000 may be revised higher.  

U.S. Movers 

Hut 8 Corp. jumped 2.3% to $80.50 following a report that the company is in the process of developing a large data center in Texas in partnership with Anthropic and Lambda. 

Reuters first reported the news, but it could not be verified through independent sources.

Robinhood Markets Inc. increased 2.5% to $107.52 following positive comments and a target price revision by Morgan Stanley. 

The brokerage firm raised its target price to $150 from the previous estimate of $124, citing expanded product offerings and higher assets and engagement from existing customers. 

Event-contract trading volume in July soared 20 times compared to a year earlier, as crypto trading volume dropped 62%, noted Morgan Stanley. 

Rising U.S. and Global Bond Yields Broadsided Risk Appetite

Benchmark indexes struggled to advance on Tuesday after a losing session, despite closing out August with net monthly gains. 

The S&P 500 Index decreased 0.5%, and the tech-focused Nasdaq Composite fell 1% as global bond yields hit multi-decade highs. 

Fresh military exchanges between the U.S. and Iran over the weekend have muted risk appetite and amplified general market volatility.  

Crude oil prices advanced for the second session in a row, and the West Texas Intermediate price per barrel advanced 2.2% to $87.72 and the Brent crude oil price increased 1.7% to $92.04. 

The yield on 10-year Treasury notes advanced to 4.78%, touching its highest mark since early 2025, driven by hawkish comments from the Fed Chair Warsh and fears of resurgent inflation.   

The yields on similar-dated maturities of the Japanese government bond advanced to a three-decade high of 3%, the UK government jumped to a 18-year high 5.2%, German government bund increased to a 16-year high of 3.36%, and French government OAT rose to a 18-year high of 4.15%. 

Benchmark indexes advanced in August, and the S&P 500 index gained 2.6%, and the Nasdaq Composite jumped 3.9%, despite rising tensions in the Middle East and bond yields advancing to multi-year highs.

Investors are looking ahead to the release of August's jobs report, and the U.S. economy is likely to add net job gains of less than 25,000. Moreover, June's job gains could be revised lower from 20,000, and July's net loss of 23,000 may be revised higher.  

U.S. Movers 

Hut 8 Corp. jumped 2.3% to $80.50 following a report that the company is in the process of developing a large data center in Texas in partnership with Anthropic and Lambda. 

Reuters first reported the news, but it could not be verified through independent sources.

Robinhood Markets Inc. increased 2.5% to $107.52 following positive comments and a target price revision by Morgan Stanley. 

The brokerage firm raised its target price to $150 from the previous estimate of $124, citing expanded product offerings and higher assets and engagement from existing customers. 

Event-contract trading volume in July soared 20 times compared to a year earlier, as crypto trading volume dropped 62%, noted Morgan Stanley. 

Japan's Bond Yields Face Upward Pressure as Near-Term Rate-Hike Expectations Rise

Japan's indexes struggled to advance as rising tensions in the Middle East stoked fears of inflation and additional pressure on the embattled yen. 

The Nikkei 225 Stock Average decreased 0.3%, the broader TOPIX edged up 0.6%, and the yen weakened to 159.82 against the U.S. dollar. 

The Japanese yen continued to slide as traders speculated that the embattled currency is likely to surpass its recent four-decade low, despite a joint US-Japan intervention a month ago. 

The renewed hostilities in the Middle East stoked fears of higher energy prices for longer, putting additional pressure on the Bank of Japan to raise rates at its meeting later in the month.  

The yield on 10-year Japanese bonds edged higher to a three-decade high of 3% amid rising expectations of tighter monetary policy following the rebound in energy prices. 

On the domestic front. Japan's capital spending on plant and equipment increased an annual 1.6% in the second quarter ending in June, according to the Ministry of Finance. 

Capital spending rebounded from a flat reading in the first quarter, boosted by a surge of 4.7% in non-capital spending and overcoming the 3.7% decline in manufacturing investment.  

Overall the data suggested that capital spending regained momentum in the second quarter, although manufacturing spending remained constrained by softer capital spending in several key industries. 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average decreased 0.3% to 66,143.57, and the broader TOPIX edged up 0.6% to 4,181.27. 

Semiconductor-linked and financial stocks declined in Tuesday's trading, as investors reacted to the weakness in the yen and a rebound in bond yields. 

Tokyo Electron decreased 3% to ¥54,700.0, Advantest Corp. fell 0.9% to ¥33,400.0, SoftBank Group increased 1% to ¥5,256.0, and Taiyo Yuden Corp. edged up 0.7% to ¥9,246.0. 

Japan's Bond Yields Face Upward Pressure as Near-Term Rate-Hike Expectations Rise

Japan's indexes struggled to advance as rising tensions in the Middle East stoked fears of inflation and additional pressure on the embattled yen. 

The Nikkei 225 Stock Average decreased 0.3%, the broader TOPIX edged up 0.6%, and the yen weakened to 159.82 against the U.S. dollar. 

The Japanese yen continued to slide as traders speculated that the embattled currency is likely to surpass its recent four-decade low, despite a joint US-Japan intervention a month ago. 

The renewed hostilities in the Middle East stoked fears of higher energy prices for longer, putting additional pressure on the Bank of Japan to raise rates at its meeting later in the month.  

The yield on 10-year Japanese bonds edged higher to a three-decade high of 3% amid rising expectations of tighter monetary policy following the rebound in energy prices. 

On the domestic front. Japan's capital spending on plant and equipment increased an annual 1.6% in the second quarter ending in June, according to the Ministry of Finance. 

Capital spending rebounded from a flat reading in the first quarter, boosted by a surge of 4.7% in non-capital spending and overcoming the 3.7% decline in manufacturing investment.  

Overall the data suggested that capital spending regained momentum in the second quarter, although manufacturing spending remained constrained by softer capital spending in several key industries. 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average decreased 0.3% to 66,143.57, and the broader TOPIX edged up 0.6% to 4,181.27. 

Semiconductor-linked and financial stocks declined in Tuesday's trading, as investors reacted to the weakness in the yen and a rebound in bond yields. 

Tokyo Electron decreased 3% to ¥54,700.0, Advantest Corp. fell 0.9% to ¥33,400.0, SoftBank Group increased 1% to ¥5,256.0, and Taiyo Yuden Corp. edged up 0.7% to ¥9,246.0. 

Hong Kong and China Indexes Under Pressure Amid Renewed Tensions In Middle East

China's indexes turned lower amid escalating tensions in the Middle East as the U.S. and Iran exchanged military strikes for the first time in over five weeks. 

The Hang Seng index decreased 1%, the mainland-focused CSI 300 Index fell 0.3%, and crude oil prices advanced 0.7%%. 

The Brent crude oil price advanced 0.7% to $91.04 per barrel amid renewed hostilities in the Strait of Hormuz. 

The U.S. military struck an island in the Strait of Hormuz, and Iran retaliated with missile and drone strikes on the UAE and Jordan.  

The rapidly escalating tensions in the Middle East confirmed that the U.S.-Iran war is far from over, despite repeated claims by the U.S. president. 

On the domestic front, a private survey showed China's manufacturing expanded in August, driven largely by resilient exports. 

The RatingDog China Manufacturing PMI increased to 51.5 in August from July's four-month low of 50.9, noted S&P Global in its monthly survey. 

The survey has a larger share of export-driven businesses and covers a wider group of mid-sized businesses compared to the official survey released by the National Bureau of Statistics. 

On Monday, a factory activity survey released by the NBS showed a slight improvement; however, the sector remained in contraction for the second consecutive month.  

China Indexes and Stocks 

The Hang Seng Index decreased 1% to 25,324.98, and the mainland-focused CSI 300 Index eased 0.3% to 4,609.82. 

Technology stocks led decliners in Hong Kong and Shanghai trading for the second consecutive session. 

CATL Ltd. decreased 1% to HK $593.0, Semiconductor Manufacturing International fell 2.9% to HK $68.75, Eoptolink Technology Ltd. declined 1.3% to ¥396.65, and Zhongji Innolight Co. Ltd. eased 0.3% to HK $1,026.0. 

Hong Kong and China Indexes Under Pressure Amid Renewed Tensions In Middle East

China's indexes turned lower amid escalating tensions in the Middle East as the U.S. and Iran exchanged military strikes for the first time in over five weeks. 

The Hang Seng index decreased 1%, the mainland-focused CSI 300 Index fell 0.3%, and crude oil prices advanced 0.7%%. 

The Brent crude oil price advanced 0.7% to $91.04 per barrel amid renewed hostilities in the Strait of Hormuz. 

The U.S. military struck an island in the Strait of Hormuz, and Iran retaliated with missile and drone strikes on the UAE and Jordan.  

The rapidly escalating tensions in the Middle East confirmed that the U.S.-Iran war is far from over, despite repeated claims by the U.S. president. 

On the domestic front, a private survey showed China's manufacturing expanded in August, driven largely by resilient exports. 

The RatingDog China Manufacturing PMI increased to 51.5 in August from July's four-month low of 50.9, noted S&P Global in its monthly survey. 

The survey has a larger share of export-driven businesses and covers a wider group of mid-sized businesses compared to the official survey released by the National Bureau of Statistics. 

On Monday, a factory activity survey released by the NBS showed a slight improvement; however, the sector remained in contraction for the second consecutive month.  

China Indexes and Stocks 

The Hang Seng Index decreased 1% to 25,324.98, and the mainland-focused CSI 300 Index eased 0.3% to 4,609.82. 

Technology stocks led decliners in Hong Kong and Shanghai trading for the second consecutive session. 

CATL Ltd. decreased 1% to HK $593.0, Semiconductor Manufacturing International fell 2.9% to HK $68.75, Eoptolink Technology Ltd. declined 1.3% to ¥396.65, and Zhongji Innolight Co. Ltd. eased 0.3% to HK $1,026.0. 

China TUESDAY

U.S. Indexes Advanced In August Despite Late-Month Caution Rooted In Higher Oil Prices and Potential Rate Hike

Stocks in New York faced selling pressure amid a renewed fight in the Middle East, stoking fears of higher-for-longer inflation. 

The S&P 500 Index decreased 0.1%, and the tech-focused Nasdaq Composite declined 0.2%, and the yield on 10-year U.S. Treasury notes edged up to 4.71%. 

U.S. Federal Reserve Chairman Kevin Warsh stressed the need to bring down inflation to the Fed's target rate of 2%, supporting the case for a possible rate hike at the mid-September policy meeting. 

"We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do," remarked Warsh at an annual gathering of central bankers on Friday. 

Despite the Fed's tough talk on inflation over the last seven years, nominal prices are still rising at a faster pace and broadening to other sectors in the economy for more than five years.  

While the U.S. Federal Reserve has persistently signaled to lift rates to contain inflation, real interest rates adjusted for inflation remain far from restrictive. 

The U.S. inflation index surpassed the Fed's target rate for the 65th month in a row in August, confirming the Fed's loose monetary policy.  

Moreover, persistent elevated energy prices are contributing to higher fuel and food prices in the U.S. and stoking broader inflationary pressures.  

The West Texas crude oil price per barrel soared 3.8% to $86.63 as the U.S. and Iran exchanged missile attacks in the Middle East. 

The U.S. Central Command confirmed to MS NOW that the U.S. attacked two rocket launchers on Larak Island that could pave the way for the reopening of the Strait of Hormuz. 

Meanwhile, Iran's state media said Iran attacked U.S. bases in Jordan in retaliation. 

Rising geopolitical tensions in the Middle East and worries about the AI trade contributed to market anxiety in August. Moreover, inflation fears sent U.S. Treasury yields to multi-year highs. 

In August-to-date, the S&P 500 Index edged up 3%, and the Nasdaq Composite advanced 4%, as investors shifted their focus to quarterly results. 

Nvidia advanced 8%, Microsoft gained 11%, Micron Technology jumped 13%, and SanDisk soared 22%.   

On the economic front, August's jobs report is likely to reveal more about the state of the U.S. economy on Friday.

Later in the week, we will also receive monthly manufacturing and services sector data. 

U.S. Movers 

AON Plc edged up 1.7% to $355.40 amid a report that the company is nearing a deal to acquire its rival USI for $17 billion, including debt. 

The acquisition of USI Insurance Services, which KKR controls, could bolster AON's presence in the U.S. middle-market insurance segment of the commercial brokerage market. 

In the year so far, AON has gained 0.7% but lost 22% over the last five years. 

U.S. Indexes Advanced In August Despite Late-Month Caution Rooted In Higher Oil Prices and Potential Rate Hike

Stocks in New York faced selling pressure amid a renewed fight in the Middle East, stoking fears of higher-for-longer inflation. 

The S&P 500 Index decreased 0.1%, and the tech-focused Nasdaq Composite declined 0.2%, and the yield on 10-year U.S. Treasury notes edged up to 4.71%. 

U.S. Federal Reserve Chairman Kevin Warsh stressed the need to bring down inflation to the Fed's target rate of 2%, supporting the case for a possible rate hike at the mid-September policy meeting. 

"We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do," remarked Warsh at an annual gathering of central bankers on Friday. 

Despite the Fed's tough talk on inflation over the last seven years, nominal prices are still rising at a faster pace and broadening to other sectors in the economy for more than five years.  

While the U.S. Federal Reserve has persistently signaled to lift rates to contain inflation, real interest rates adjusted for inflation remain far from restrictive. 

The U.S. inflation index surpassed the Fed's target rate for the 65th month in a row in August, confirming the Fed's loose monetary policy.  

Moreover, persistent elevated energy prices are contributing to higher fuel and food prices in the U.S. and stoking broader inflationary pressures.  

The West Texas crude oil price per barrel soared 3.8% to $86.63 as the U.S. and Iran exchanged missile attacks in the Middle East. 

The U.S. Central Command confirmed to MS NOW that the U.S. attacked two rocket launchers on Larak Island that could pave the way for the reopening of the Strait of Hormuz. 

Meanwhile, Iran's state media said Iran attacked U.S. bases in Jordan in retaliation. 

Rising geopolitical tensions in the Middle East and worries about the AI trade contributed to market anxiety in August. Moreover, inflation fears sent U.S. Treasury yields to multi-year highs. 

In August-to-date, the S&P 500 Index edged up 3%, and the Nasdaq Composite advanced 4%, as investors shifted their focus to quarterly results. 

Nvidia advanced 8%, Microsoft gained 11%, Micron Technology jumped 13%, and SanDisk soared 22%.   

On the economic front, August's jobs report is likely to reveal more about the state of the U.S. economy on Friday.

Later in the week, we will also receive monthly manufacturing and services sector data. 

U.S. Movers 

AON Plc edged up 1.7% to $355.40 amid a report that the company is nearing a deal to acquire its rival USI for $17 billion, including debt. 

The acquisition of USI Insurance Services, which KKR controls, could bolster AON's presence in the U.S. middle-market insurance segment of the commercial brokerage market. 

In the year so far, AON has gained 0.7% but lost 22% over the last five years.