Asian shares are mixed and oil prices surge after US strike on Iranian
rocket launchers
[August 31, 2026] By
ELAINE KURTENBACH
BANGKOK (AP) — Shares were mixed in Asia and U.S. futures declined
Monday on expectations that the U.S. Federal Reserve may raise interest
rates soon.
Oil prices surged about 3% after U.S. forces struck Iranian rocket
launchers on the Strait of Hormuz, marking their first military action
in a month. The Trump administration just days earlier had shifted its
focus to economic pressure, and a return to open conflict would be
dangerous for the region.
Brent crude, the international standard, was up 2.9% at $90.62 per
barrel early Monday. U.S. benchmark crude oil jumped 2.7% to $85.62 per
barrel.
“The Middle East had finally gone quiet enough for oil traders to start
sanding some of the war premium out of crude. Then Sunday arrived, with
a reminder that quiet in the Strait of Hormuz is not the same as peace,”
Stephen Innes of SPI Asset Management said in a commentary.
Markets in Asia fell following a speech Friday by Fed Chairman Kevin
Warsh that reinforced expectations the U.S. central bank will do what is
needed, such as raising rates, to bring inflation down despite possible
short-term pain for the economy.
The futures for the S&P 500 and the Dow Jones Industrial Average slipped
0.1%.
In Tokyo, the Nikkei 225 lost 0.1% to 66,311.93, while the Kospi in
South Korea reversed earlier losses, gaining 0.5% to 6,820.02.
Hong Kong's Hang Seng lost 0.1% to 25,566.99 and the Shanghai Composite
index gained 0.9% to 3,986.30.
Shares in e-commerce and fast fashion giant Shein are due to begin
trading in Hong Kong on Tuesday in the city's biggest initial public
offering this year, part of a trend toward big Chinese-founded companies
raising funds in Chinese markets.
An official survey released Monday showed Chinese factory activity
remained in contraction for a second straight month in August, though
there were slight improvements in some areas such as new export orders
and production.
Elsewhere in the region, Australia's S&P/ASX 200 lost 0.2% to 9,076.00.
Taiwan's Taiex fell 0.4% and the Sensex in India slipped 0.4%.
On Friday, the S&P 500 fell 0.2% and the Dow industrials dipped by less
than 0.1%. The Nasdaq composite fell 0.5%.
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A person walks in front of an electronic stock board showing Japan's
Nikkei index at a securities firm Monday, Aug. 31, 2026, in Tokyo.
(AP Photo/Eugene Hoshiko)
 In what is seen as a big move for
the bond market, the yield on the two-year Treasury, which closely
tracks expectations about Fed moves, jumped to 4.35% from 4.22% just
before Warsh's speech at an annual economic symposium held in
Jackson Hole, Wyoming.
Worries had grown that his tough talk about getting inflation down
to the Fed’s 2% target may be just that. The Fed could hike
short-term interest rates to get price increases under control, but
it could also be reluctant to do so because that would slow the
economy and hurt prices for investments.
U.S. President Donald Trump, who appointed Warsh, has emphasized he
wants lower interest rates.
Warsh was adamant again on Friday that he wants to give financial
markets fewer clues about what the Fed plans to do with rates for
its two jobs of keeping inflation low and the job market strong. But
he also said “short-term interest rates are the predominant tool”
for the Fed to do its job.
Longer-term yields also rose following some initial zigzags, but not
by as much as shorter-term yields. The 10-year Treasury yield
climbed to 4.72% from 4.67% late Thursday, and the 30-year Treasury
yield got to 5.21% from 5.19%.
Yields for longer-term bonds have risen this summer, in part because
of worries that inflation will remain high.
In other dealings early Monday, the U.S. dollar fell to 159.64
Japanese yen from 160.10 yen. It has rebounded after falling for a
spell following a rare coordinated intervention by the U.S. Treasury
and Japanese regulators in late July.
The euro rose to $1.1600 from $1.1580.
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