Markets between Hormuz and rates: the return of geopolitical risk shakes up the beginning of September.

From the weekend to the start of September, geopolitics, energy, and interest rates began to move together again. The renewed exchange of attacks between the United States and Iran brought the risk of disruptions in the Strait of Hormuz back to the forefront of valuations, while the surge in oil and gas prices reignited inflationary pressures just as the Federal Reserve and the ECB appeared poised for further monetary tightening. The result was a more nervous market, with bonds on the sell-off, equities under pressure, and precious metals unable, at least for now, to fully fulfill their role as safe havens.

Hormuz returns to the center of the energy market

The new phase of tension began with the US attack on two Iranian missile launchers on the island of Larak, followed by Tehran's response against two American bases in Jordan. Donald Trump then promised a tougher response, raising fears that the conflict could escalate again.

The most sensitive point, however, remains the Strait of Hormuz . Two supertankers carrying a total of approximately 4 million barrels of Saudi crude were hit while exiting the sea passage. The market reacted quickly: on Monday, Brent crude rose 2.7% to $90.49 a barrel , later staying above the $90 level. The rise primarily reflects the growing difficulty in ensuring continuity of flows through one of the world's main energy bottlenecks.

Pressure isn't just coming from the Gulf. Russia has extended its ban on diesel exports by manufacturers in an attempt to stabilize the domestic market following repeated Ukrainian attacks on refineries. Moscow has also lowered its oil production forecast for 2026 to around 9.88 million barrels per day , the lowest annual level since 2009. Meanwhile, new Russian strikes have hit port and energy infrastructure in the Odesa region, also increasing the risk to the flow of grain and other raw materials from the Black Sea.

Europe: More expensive energy, higher inflation

The new energy shock is rapidly becoming a monetary problem. European gas prices have reached their highest levels in about three and a half years , while supply difficulties linked to the Middle East conflict are making it more difficult to replenish supplies ahead of winter.

In August, Eurozone inflation rose to 3.3% , from 2.9% in July, largely due to rising energy costs. The core rate, however, fell to 2.4% , indicating that rising energy prices have not yet transformed into a new, widespread price spiral. For the ECB, however, the outlook remains delicate, and the market considers a further rate hike in September highly likely.

European industry, meanwhile, continues to show reasonable resilience. The Eurozone manufacturing PMI rose to 52.7 , its highest level in over four years, thanks to the recovery in orders and exports. This is an unusual combination: a more robust industrial economy, but energy and inflation are accelerating again. This environment reduces the scope for more accommodative monetary policies.

Bonds under pressure, Fed more hawkish

The real center of volatility was the bond market. Rising oil prices reinforced fears that inflation could remain elevated for longer, while hawkish messages from Jackson Hole reinforced the idea of further rate hikes.

The most symbolic case is Japan: the yield on the 10-year JGB has reached 3% , a level not seen since 1996. German and French yields have also risen to multi-year highs, while in the United States, the market has increased the implied probability of a Fed hike in September to over 65% . This movement signals a global repricing of the cost of money, fueled simultaneously by inflation, fiscal policy, and geopolitical risk.

The impact on stocks was immediate. On Monday, the Dow Jones lost 0.70% , the S&P 500 0.33% , and the Nasdaq 0.12%. In Europe, the STOXX 600 lost 0.6% , while the DAX lost 1.2% . The energy sector was one of the few areas of support, while technology, utilities, and stocks more sensitive to yields suffered the most.

China in chiaroscuro and divided metals

Mixed signals came from China. The official manufacturing PMI improved to 49.8 , but remained in contraction territory. The private RatingDog/S&P survey, however, showed a decidedly more positive picture, with the index rising to 51.5 and improving production, new orders, and exports.

This divergence clearly illustrates the state of the Chinese economy: exports, high-tech, and advanced manufacturing continue to support activity, but domestic demand remains fragile. Improved signals from industry have nevertheless supported manufactured metals such as copper, aluminum, and zinc, while iron ore and steel remain more vulnerable to weak domestic demand.

Gold also exhibited seemingly counterintuitive behavior. Despite the geopolitical escalation, the metal fell more than 2% on Tuesday, falling to $4,370 an ounce . The strengthening dollar and rising real yields outweighed the demand for protection. In other words, geopolitics favored energy, but not all traditionally safe-haven assets.

The market is pricing in inflation risk again

The common thread linking these movements is the possibility that the energy shock will once again turn into inflation, just as developed economies still show some resilience. Oil prices above $90 , European gas at multi-year highs, and rising bond yields are forcing investors to reconsider the idea of a rapid return to looser monetary policies.

For equities, this means valuations are more difficult to sustain, especially in growth segments. For bonds, it means an increase in the premium investors demand. And for commodities, it means greater dispersion: energy is buoyed by scarcity and geopolitical risk, industrial metals are tied to China's prospects, and gold is held back by the opportunity cost of interest rates.

The beginning of September was therefore characterized not by a single shock, but by the convergence of three forces: geopolitics, inflation, and monetary policy . And it is precisely this combination that makes the market more fragile and sensitive to the central banks' next moves.