USD Gains, Oil Surges Above $90 as US-Iran Conflict Reignites

September trading began with the dollar strengthening, Treasury yields rising and US stocks declining. Crude oil climbed above $90 after renewed hostilities between the US and Iran stoked worries about additional disruptions to oil shipments from the Middle East. Attempted attacks on American personnel and commercial ships in the Strait of Hormuz triggered US strikes, refocusing market attention on that vital waterway. The surge in energy costs amplified inflation concerns at a time when the latest manufacturing figures indicated slower expansion alongside persistent cost pressures—a difficult mix for the Federal Reserve and market participants.

The US dollar gained ground on all major currencies, recording its biggest advances versus the New Zealand dollar and the Swiss franc. The euro held its value the best among the group but still declined as elevated US Treasury yields underpinned the greenback.

The greenback's percentage moves versus the main currencies were:

• EUR: +0.22%
• JPY: +0.29%
• GBP: +0.26%
• CHF: +0.42%
• CAD: +0.30%
• AUD: +0.32%
• NZD: +0.44%

US Treasury yields climbed across the curve, with short and intermediate maturities leading the rise. The 10-year note yield reached 4.80%, pushing past the 4.75% threshold and bringing the key 5% mark into closer sight.

The latest Treasury yield readings were:

• 2-year yield: 4.4019%, up 5.19 basis points.
• 5-year yield: 4.5587%, up 5.17 basis points.
• 10-year yield: 4.8001%, up 4.21 basis points.
• 30-year yield: 5.2719%, up 2.29 basis points.

Equities in the US faced headwinds from that environment. The Nasdaq and Russell 2000 recorded the largest drops, while the Dow industrials and the S&P 500 also fell. Rising yields compounded the difficulties for a market that was already grappling with high energy expenses and ongoing price pressures.

US stock indices ended the session as follows:

• Dow industrial average: Down 419.06 points, or 0.79%, at 52,772.27.
• S&P 500: Down 54.67 points, or 0.71%, at 7,631.48.
• Nasdaq Composite: Down 271.11 points, or 1.03%, at 26,099.77.
• Russell 2000: Down 36.32 points, or 1.23%, at 2,920.13.

Technology and software stocks were among the day's biggest decliners. CrowdStrike, Fortinet, and Palo Alto Networks each dropped significantly, and Dell posted a 6.80% loss. Shares of crypto-related companies also weakened, tracking bitcoin's decline.

The following stocks were among the day's notable losers:

• SharkNinja (SN): -9.13% at $174.92.
• Cadence Design Systems (CDNS): -7.60% at $313.04.
• Whirlpool (WHR): -7.10% at $37.94.
• CrowdStrike (CRWD): -6.90% at $215.07.
• Dell Technologies (DELL): -6.80% at $425.00.
• Strategy (MSTR): -6.03% at $124.93.
• Coinbase (COIN): -6.00% at $176.84.
• Ciena (CIEN): -5.87% at $360.33.
• Synopsys (SNPS): -5.63% at $414.82.
• Datadog (DDOG): -5.57% at $223.84.

European equity markets also closed in negative territory:

• Germany’s DAX: -1.06%.
• France’s CAC 40: -0.39%.
• UK’s FTSE 100: -0.32%.
• Spain’s Ibex: -0.75%.
• Italy’s FTSE MIB: -1.33%.

In economic data, the ISM manufacturing survey indicated ongoing expansion, though the underlying details were weaker. The main index slipped to 54.6 from 55.6, missing the forecast of 55.2. New orders decreased by 3.0 points to 53.7, employment dropped to 51.2 from 52.8, and order backlogs fell to 51.8 from 55.0.

Of the ten components, six decreased, three increased, and one was unchanged. The challenging aspect was that deceleration in growth did not yield lower price pressures. The prices subindex stayed elevated at 71.1, and the supplier deliveries index rose to 59.3, pointing to slower delivery times. Manufacturing continues to expand, but the pace is moderating while costs stay troubling.

The final S&P Global manufacturing PMI presented a slightly more favorable top-line number. It was adjusted to 53.9 from the initial reading of 53.2, holding steady compared with July. But output growth decelerated to its slowest rate since February, and export orders fell for the 14th straight month.

Manufacturing firms kept adding to inventories as a hedge against rising costs and supply-chain interruptions. This helped sustain production levels, but it also prompted doubts about whether the expansion was driven by inventory accumulation rather than genuine demand improvement. On the upside, business sentiment climbed to a three-month peak, and employment growth recorded its fastest rate since the beginning of 2026.

The July JOLTS data indicated a generally stable jobs market. Openings rose to 7.271 million from 7.182 million, a bit under the expected 7.300 million. Hires and separations remained roughly unchanged at around 5.1 million each, while quits stayed near 3.1 million and layoffs approximated 1.7 million.

There was no indication of a pickup in job cuts, but neither was there clear evidence of a boost in hiring activity. Employment in professional and business services dropped by 188,000, marking a weak spot. The report shifts attention to Friday's employment figures as the next key gauge of the health of the labor market.

Crude oil was the biggest mover in the commodity complex, rallying over 5.5% to surpass $90 in the latest reading. Gold and silver posted sharp declines, pressured by a stronger dollar and rising yields. Bitcoin also traded lower.

The following were the closing snapshots:

• WTI crude oil: $90.49, up $4.73, or 5.52%.
• Gold: $4,328.58, down $119.32, or 2.68%.
• Silver: $64.07, down $2.43, or 3.66%.
• Bitcoin: $77,350, down $1,221, or 1.55%.

The overall takeaway from the day's session was that slowing expansion has not yet alleviated inflationary pressures. Manufacturing stayed in growth territory, the labor market held steady, and price increases persisted. With oil above $90 and the 10-year yield near 4.80%, equity buyers had scant incentive to become active. Dollar buyers and bond bears continued to dominate.