Oil Tops $90 as US and Iran Strikes Push Yields to 2023 High
A second wave of US strikes near the Strait of Hormuz drove crude past 90 dollars and lifted the 10-year Treasury yield to its highest level since 2023, dragging stocks and even gold lower.
Market Snapshot
All figures are indicative opening levels as of this morning, September 2.
Futures point to a soft open as the oil and rates shock keeps a lid on risk after Tuesday’s selloff.
The Dow and S&P 500 slip fractionally while the Nasdaq lags near 0.6 percent and the VIX firms toward 16.5, but the real action is in commodities and rates, with WTI around 91 and both gold and silver falling as higher yields beat the safe-haven bid.
The bid is where the story is, with Exxon Mobil riding the crude spike and Lockheed Martin firming as the conflict escalates, while Broadcom holds near 371 ahead of its earnings after the close.
Main Story
Renewed US-Iran fighting is driving every major asset class this morning, and the second-order move in rates is the one to watch.
- A fresh round of US strikes near the Strait of Hormuz sent WTI above 90 dollars and Brent near 95, its highest in nearly six weeks, after crude jumped more than 5 percent Tuesday, per TheStreet.
- The mainstream read is a straightforward supply-risk premium on a corridor that carries close to a fifth of the world’s oil.
- What the tape may be missing is the feedback loop into inflation, with the 10-year yield hitting 4.814 percent, its highest since 2023, and CME-implied odds of a September Fed hike now near 70 percent.
Chart of the Day
WTI has spent late August churning in the mid 80s before this week’s strikes cleared the 85 dollar resistance that had capped it.
The gap higher to around 91 came on the second wave of attacks near the Strait of Hormuz, a level crude has not held since the summer.
The next line to watch sits near 95, the Brent handle that would keep the war premium and the inflation story firmly in play.
Technical Trading
A few levels worth watching across the tape:
- The 10-year yield cleared its range at 4.814 percent, its highest since 2023, with the next resistance near 4.85 percent as the 30-year pushes toward 5.27 percent.
- WTI broke the 85 dollar resistance that held through late August, leaving 95 as the next overhead and prior range support back near 84.
- Gold slid below 4,400 to around 4,374 and silver dropped harder, near 64.76, with the World Gold Council flagging 4,215 as a possible pullback level if momentum fades.
Global News
- A second wave of US strikes near the Strait of Hormuz revived the war premium, pushing Brent near 95 dollars and WTI above 90.
- The 10-year Treasury yield hit 4.814 percent, its highest since 2023, as the oil shock fed inflation fears and yields rose in the UK, Germany and Japan.
- CME FedWatch now shows around a 70 percent chance of a September Fed hike after Chair Kevin Warsh’s hawkish comments.
- Gold and silver fell hard despite the geopolitics, with higher real yields and a firmer dollar overpowering the safe-haven bid.
- Broadcom headlines earnings today, with AI chip revenue guided near 16 billion dollars, alongside ADP payrolls and the Fed’s Beige Book.
Texas News
Higher crude is a tailwind for Texas producers, but the Dallas Fed’s latest survey shows Permian operators holding output growth to roughly 2 to 4 percent even with prices well above Midland and Delaware breakevens of 69 and 63 dollars.
Rising oilfield service costs and gas takeaway limits remain the bigger constraints on drilling than price.
Looking Ahead
Wednesday, September 2: Broadcom reports after the close with AI chip revenue guided near 16 billion dollars, the day’s biggest earnings test, while ADP payrolls and the Fed Beige Book also land.
Friday, September 4: The August jobs report arrives, the key input for a Fed meeting where a September hike is now priced near 70 percent.
Monday, September 7: US markets are closed for Labor Day, leaving thin overseas trading to absorb any weekend escalation.
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Prices from Yahoo Finance, CNBC and Fortune. Technical levels from Investing.com and FXStreet. News from Reuters, Al Jazeera and CNBC.
For informational purposes only. Not investment advice. Prices are indicative opening levels and may differ from your broker.
