U.S. stock futures opened the final day of August under pressure after a weekend of military escalation in the Strait of Hormuz and a hawkish message from Federal Reserve Chair Kevin Warsh at Jackson Hole. Dow futures fell 85 points, or 0.2%, while S&P 500 and Nasdaq futures each dropped 0.2% in premarket trading. Oil prices surged, with Brent crude up 2.3% to $90.17 a barrel and West Texas Intermediate climbing 2.3% to $85.32.
U.S. forces struck two Iranian rocket launchers on Larak Island in the Strait of Hormuz on Sunday. Iran responded by attacking U.S. forces in Jordan and claimed to have hit a tanker in the shipping lane. President Trump posted that Iran’s main oil export terminal on Kharg Island was being “blown to smithereens,” though there was no official military confirmation. Energy stocks rallied: Chevron rose about 2%, Halliburton gained 2.4–2.5%, Exxon Mobil rose 1.5–1.6%, and Occidental Petroleum added 1.8%. PG&E dropped 10% after California lawmakers blocked a wildfire liability reform proposal, while Pinterest fell 2% after its CFO resigned.
Fed rate hike expectations jumped after Warsh signaled that inflation risks remain underpriced. The probability of a September rate hike climbed from around 40% a week ago to 57–60% by Monday morning, according to the CME FedWatch tool. Barclays now expects 25-basis-point hikes at both the September and December meetings, while JPMorgan’s chief U.S. economist called the September meeting “live” but still expected the first hike in December. Two-year Treasury yields held at 4.34% after jumping nearly 12 basis points Friday; Japan’s 2-year bond yield hit a 31-year high and Germany’s 2-year yield reached its highest since July 2024.
Amid the risk-off tone, Bitcoin rebounded to around $78,500 early Monday, up from roughly $77,500 at the close of last week, and Strategy rose more than 2% in premarket trading after dropping 7% on Friday. Semiconductor stocks edged higher, with Intel up 1.3% and Nvidia gaining 0.6%, while software names pulled back. August overall remained positive: the Dow was up 2% for the month, the S&P 500 nearly 3%, and the Nasdaq around 4%. Key jobs data due this week, including JOLTS Job Openings on Tuesday and the U.S. Employment Report on Friday, along with earnings from Broadcom and Dell Technologies, will likely shape the next leg of macro and crypto sentiment.
