Oil Surges After New Middle East Strikes -- WSJ

By Alexander Osipovich

Oil prices surged higher amid increased tensions in the Middle East, weighing on stock and bond markets.

The U.S. military said it was carrying out strikes on Iranian targets on Tuesday, after Iran attempted attacks on commercial ships and fired missiles at American bases. Brent crude futures rose 4% above $94 a barrel. The move pressured bonds, where a global rout is rolling into September, raising borrowing costs for governments.

Worries that an impasse in the Middle East will keep inflation hot and force central banks to raise rates are fueling the bond selloff.

Also hitting bonds: Swelling fiscal deficits world-wide, increased competition from corporate borrowers and Fed Chairman Kevin Warsh's reluctance to give forward guidance.

The 10-year Treasury yield jumped, and was on track for its highest level since January 2025; its Japanese equivalent hit 3%, its highest level since 1996 after Treasury Secretary Scott Bessent hinted at possible BOJ rate hikes. Bond yields also rose to multiyear highs in Germany and France.

U.S. stocks fell, with the Nasdaq leading losses. Asian stocks had a downbeat session, with fast-fashion company Shein making a subdued stock-market debut.

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(END) Dow Jones Newswires

September 01, 2026 14:34 ET (18:34 GMT)