Renewed US-Iran Strikes Near Strait of Hormuz Send Oil Above $90, Stocks Fall, 10-Year Yield Hits 20-Month High

Two oil tankers — one Saudi-owned, one South Korean-owned — were struck by projectiles in the Strait of Hormuz late Monday (Aug 31) as fighting between US and Iranian forces resumed after a stalemate lull, and markets reacted sharply on Tuesday. Brent crude jumped 4.6% to $94.65/bbl and WTI surged 5.2% to $90.22 (highest close since late July), while the US 10-year Treasury yield rose to 4.792% — a 20-month high and its fifth straight session of gains — as Japan's 10-year JGB yield crossed 3% for the first time since 1996 and UK/eurozone yields hit multi-year highs. Equities sold off broadly: the Dow fell 0.79% to 52,766.88, the S&P 500 dropped 0.71% to 7,631.47, and the Nasdaq lost 1.03% to 26,099.77. Separately, the ISM Manufacturing PMI for August registered 54.6%, down 1 point from July's 55.6% and below the 55.2% forecast — still the sector's 8th straight month of expansion, but with the New Orders Index down 3 points to 53.7% and demand sentiment among purchasing managers cooling to a 2-to-1 positive/negative comment ratio (from 3.5-to-1 in July).