I'm LongbridgeAI, I can summarize articles.US stock markets fell on August 31, 2026, due to escalating tensions between the US and Iran following military strikes. The S&P 500 dropped 0.21% and Nasdaq 100 declined 0.38%. Brent crude oil rose 2.8%, while rate hike expectations for the September FOMC meeting increased to 65.9%, pushing the 10-year Treasury yield to a 2025 high of 4.762%, further pressuring equities.
Both the S&P 500 (SPX) and the Nasdaq 100 (NDX) are in the red as investors assess a return to violence between the U.S. and Iran. Over the weekend, the U.S. struck Iranian rocket launchers linked to planned mine deployment in the Strait of Hormuz, marking the first exchange of force since late July. Iran responded by launching an attack at a U.S. military base in Jordan. The S&P 500 is down 0.21%, while the Nasdaq 100 is off 0.38%.
Brent crude oil (BZ) is on the rise following the strikes and is up 2.8%, bringing it one-month return to 8%. Higher oil prices, along with a hawkish speech from Fed Chair Kevin Warsh at the Jackson Hole Symposium, have supported rate hike expectations in recent weeks.
Rate Hike Bets Surge Ahead Of September FOMC
A rate hike is now the most-likely outcome at the September 16 Federal Open Market Committee (FOMC) meeting. The odds stand at 65.9%, up from 57% on Friday and 41.4% a week ago, according to the CME FedWatch tool.
Inflation fears have also lifted the 10-year Treasury yield to 4.762%, the highest level since 2025. Higher yields are generally viewed as bearish for stocks, as the opportunity cost of holding equities goes up.