Global equity markets came under pressure on Tuesday as Brent crude traded near $100 per barrel and investors braced for a potential renewed round of central bank rate increases. US stock futures pointed lower after the Labor Day holiday, with Dow Jones futures down 0.8% to 53,013, S&P 500 futures off 0.3% to 7,691 and Nasdaq 100 futures roughly flat at 29,593.
Brent crude rose 1.4% to a six-week high near $99, while WTI approached $93, marking a third consecutive session of gains. The catalyst was geopolitical: Iran threatened to impose a maritime exclusion zone across the Persian Gulf after senior official Mohsen Rezaei cited US economic warfare. Iran-backed Houthi forces also attacked Saudi Arabia, raising worries about energy infrastructure in a region critical to global oil supply.
The renewed oil spike amplified inflation concerns after Friday’s stronger-than-expected US jobs report revived bets that the Federal Reserve may raise interest rates again. Investors now view the upcoming US CPI report as a key test; if inflation remains above the Fed’s 2% target, another rate hike could arrive as soon as this month. Treasury yields climbed, and the US national debt crossed the $40 trillion mark ahead of a three-year note auction.
European markets mirrored the risk-off tone. The pan-European STOXX 600 fell 0.6% to about 646 points, while Germany’s DAX, France’s CAC 40 and London’s FTSE 100 dropped between 0.4% and 0.6%. Novartis tumbled more than 10%, heading for its worst day on record after its del-desiran trial failed, the second late-stage drug failure in two days. Sandoz gained 4.5% on its 2025–2035 sales target, while Telecom Italia rose 2.5% after Poste Italiane sweetened its takeover offer.
The European Central Bank is widely expected to raise rates by 25 basis points on Thursday. Banking shares fell 1.3% on eurozone recession concerns, UK and German bond yields rose, and the euro held near $1.16. For digital assets, the combination of higher energy prices, tighter monetary policy and rising yields is likely to weigh on risk sentiment and liquidity, creating a challenging backdrop for the broader crypto market.
