Iran strikes send oil to a 20-month high; Wall Street shrugs it off

Iran struck US allies Jordan, the UAE and Kuwait with missiles and drones overnight, in retaliation for fresh American airstrikes on Iranian military targets. The Strait of Hormuz shock reignited an inflation scare: Brent crude surged to a 20-month high near $99.38/bbl, the 10-year Treasury yield spiked to 4.80% — its highest since January 2025 — and borrowing costs in Japan and the UK pushed toward multi-decade highs. Yields eased back to 4.75% as the US session wore on, and equities staged an afternoon rally despite the risk-off open.

Markets

US indices closed higher as of the close on September 3: the S&P 500 added 0.58% to 7,711.30, the Dow Jones Industrial Average climbed 0.78% to 53,478.18, and the Nasdaq Composite gained 0.80% to 26,427.55. Snowflake soared more than 20% on a blowout quarter, Dell Technologies jumped 15.8%, Nvidia rose on news it will acquire AI platform Hugging Face, and Robinhood gained on analyst upgrades. Broadcom shares fell despite beating earnings estimates. Industrials led sector gains, with financials and consumer cyclicals also strong as investors rotated into growth names.

EMEA diverged from the US: the FTSE 100 added 0.29%, its oil-and-gas-heavy weighting cushioning it against the same forces hitting the continent, while the DAX fell 1.09% and the CAC 40 dropped 0.79%, both hit harder by the spike in yields and Iran-driven risk aversion.

Commodities

Oil surged on Hormuz-shock fears: Brent hit $99.38/bbl, a 20-month high, while WTI opened at $90.58/bbl. Gold rose about 2.3% to roughly $4,490/oz on safe-haven demand.

Crypto

Bitcoin traded little changed near $77,900, down 0.1% versus Wednesday's open, briefly dipping below $77,000 intraday. Ethereum was down roughly 1%, trading near $2,390-$2,495 depending on the source. Spot Bitcoin ETFs drew $101.15 million in net inflows on September 2, led by BlackRock's IBIT with $115 million, following a $236.5 million outflow the prior day — a pattern that reads as selective rotation rather than a broad exit. Altcoin ETF flows (ETH, XRP, SOL) were mixed across sources.

What it means for crypto trading

Crypto is currently trading off the same oil-and-yield axis as equities, not off any crypto-specific news — there was no concrete regulatory development in this window. The near-term catalyst most likely to move crypto is a further escalation near the Strait of Hormuz, or a hawkish outcome at the September 15-16 FOMC meeting, where market-implied odds currently lean toward a hold or even a 25-basis-point hike, not a cut, under new Fed chair Kevin Warsh.

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