August 31, 2026

The United States and Iran exchanged attacks over the weekend

International

The United States attacked two missile launch platforms on the Iranian island of Larak, in the Strait of Hormuz, on Sunday, and Iran responded with attacks on two US air bases, one in Jordan and the other in the United Arab Emirates. Commercial traffic through the strait—a route through which approximately one-fifth of the world's oil passes—was significantly reduced, with the number of daily vessels considerably lower than usual. Against this backdrop, Brent crude oil is up around 3.0% this morning.

As for Friday's trading, the main US stock indices closed mixed. The S&P 500 fell 0.2%, accumulating a 12.7% gain so far this year, while the Nasdaq slipped 0.5%, with a year-to-date gain of 13.6%. The Dow Jones Industrial Average remained virtually unchanged, maintaining an 11.4% gain for the year.

Regarding US Treasury yields, the curve showed widespread gains on Friday. The 1-year yield moved from 4.01% to 4.13%, while the 3-year bond advanced from 4.30% to 4.41%. Consequently, in the longer end of the spectrum, the 10-year yield settled at 4.72%, up from 4.68% previously.

At the Jackson Hole symposium, Federal Reserve Chairman Kevin Warsh indicated that the central bank's primary focus should be on prices, describing financial conditions that can hardly be described as restrictive and a labor market at full employment, with an unemployment rate of 4.1%. He specified that the Personal Consumption Expenditures (PCE) Price Index stands at 3.7% year-on-year—4.1% annualized over the last six months—and that 54% of its 199 components are rising above 3.0% year-on-year, compared to 32% before the pandemic. He also indicated that the practice of forward communication regarding the direction of monetary policy has survived its initial reception and ruled out committing to an explicit reaction function. However, he conditioned the policy's direction on core inflation converging to 2.0% with sufficient clarity and speed.

Finally, regarding commodities, gold fell 3.1% to USD 4,455.0 per ounce, while soybeans rose 1.7% to USD 469.4 per ton. In the energy segment, WTI fell −0.2% to USD 83.4 per barrel and Brent dropped −0.4% to USD 89.3 per barrel.

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