Oil Spike and Bond Rout Put Global Stocks on the Defensive

Oil prices have surged after fresh U.S. strikes on Iran, triggering a global sell-off in government bonds and putting renewed pressure on equities. On Tuesday, September 1, the Dow Jones Industrial Average sank more than 400 points, while the S&P 500 and Nasdaq logged a third straight decline, led by weakness in big technology names. The move reflects mounting concerns that a worsening Middle East conflict could fuel inflation just as governments are issuing large volumes of new debt. The U.S. 10‑year Treasury yield has climbed toward 4.8%, and some analysts now see 5% as a realistic near‑term risk. Rising yields typically weigh on equity valuations by increasing discount rates and pushing up borrowing costs for companies and households, raising the odds of an economic slowdown. Investors are now laser‑focused on incoming economic data and how central banks—especially the Federal Reserve—respond. The combination of higher oil and higher yields is emerging as a key test for risk assets heading into the autumn.