U.S. Strikes Iranian Rocket Launchers as Oil Prices Rise

The United States Central Command conducted military strikes on Sunday against two Iranian rocket launchers located on Larak Island. The targeted launchers were preparing to deploy mines into the Strait of Hormuz, ending several weeks of relative calm in the region.

The escalation triggered an immediate increase in global energy markets. U.S. oil rose 2.1% to $85.14 per barrel, while Brent futures increased 2% to $89.90 during early Asia trading. This volatility follows a month of choppy trading in August, despite the S&P 500 and Dow Jones Industrial Average reaching all-time highs driven by tech sector gains.

Simultaneously, Federal Reserve Chairman Kevin Warsh delivered a hawkish speech at Jackson Hole, warning that inflation is not meaningfully slowing and that the central bank has more work to do. His comments led traders to increase bets on a 25 basis point interest rate hike in September, contributing to a stronger U.S. dollar and a dip in S&P 500 futures.