Oil Higher on Hormuz Escalation Amid Quiet Markets Due to Labor Day

By Joe Stonor

Oil prices continued to rise in early European morning trade after Iranian forces fired ballistic missiles on two U.S. Navy warships, representing a fresh escalation in the six-month conflict.

Brent crude oil traded close to $97 a barrel as both the U.S. and Iran ramped up efforts to assert control over the crucial Strait of Hormuz. In response to the Islamic Revolutionary Guard Corps attack on American ships, the U.S. military struck three Iranian oil tankers.

The Japanese yen rose by around 1% to trade at its highest level since May, when the currency rallied on market expectations that Japanese authorities would intervene to support prices.

U.S. stock futures were mixed and Treasurys didn't trade, as U.S. investors break for Labor Day. Futures for the Dow Jones Industrial Average slipped 0.4%, while S&P 500 futures traded flat. Nasdaq futures rose 0.3%. The dollar slipped against a basket of currencies amid light trade.

A rally in U.S. tech stocks Friday was picked up in Asia Monday, with Korea's Kospi jumping 4.6%. Memory chip makers SK Hynix and Samsung Electronics shares surged 8.3% and 5.7%, respectively. In Japan, the Nikkei 225 rose 2.1% as SoftBank Group shares jumped 11%. Hong Kong's Hang Seng index slipped 1%.

European AI-related stocks also gained, with ASML rising 1.7%. Weakness in healthcare and consumer-facing stocks dragged on the continent's indexes, however, with the Stoxx 600 trading 0.15% lower.

Higher oil prices helped to push sovereign bond yields higher across the eurozone. Yields on 10-year German Bunds rose by 2.3 basis points to 3.376% after the far-right Alternative for Germany won a regional election. In the U.K., 10-year gilts rose by 3.8 basis points to 5.098% ahead of a major speech on the state of the economy by finance minister John Healey.

Gold futures slipped to $4,442.40 a troy ounce in New York, while Bitcoin held just below $80,000 in low volume trade.

For the week ahead, U.S. inflation data will be the main event after hotter-than-expected jobs data Friday raised expectations of a Federal Reserve rate hike on Sept 16. The market is split on whether the Fed will hike, with a quarter-point raise given 56% probability, according to LSEG. The European Central Bank is expected to raise rates Thursday.

Write to Joe Stonor at josephmichael.stonor@wsj.com

(END) Dow Jones Newswires

September 07, 2026 04:25 ET (08:25 GMT)