U.S. and Iran Exchange Military Strikes Near Strait of Hormuz

The United States and Iran exchanged military strikes on September 2, 2026, marking the most significant escalation between the two nations since July. U.S. forces targeted Iranian military sites near the Strait of Hormuz, while Tehran launched strikes against U.S. assets across the region.

The geopolitical conflict triggered an immediate global market downturn. Brent crude oil prices rose to five-week highs, reaching $95.18 a barrel, which intensified global inflation concerns. In response, global stocks fell, including significant declines in Japan's Nikkei 225 and South Korea's KOSPI.

Financial markets also saw a surge in bond yields, with the U.S. 10-year Treasury bond approaching a three-year high of 4.8182 per cent. This volatility strengthened the U.S. dollar as investors sought a safe haven. These market shifts coincide with increased expectations for a U.S. interest rate hike during the Federal Reserve's September 16 meeting, following hawkish comments from Chair Kevin Warsh.