To The Moon

2 September 2026

Renewed US-Iran hostilities and attacks on oil tankers in the Strait of Hormuz sent oil prices sharply higher. Rising inflation and rate-hike concerns pushed Treasury yields up and dragged US equities lower for a third consecutive session.

S&P 500 fell 0.71% to 7,631.47

Dow Jones fell 0.79% to 52,766.88

Nasdaq fell 1.03% to 26,099.77

US 2-year Treasury yield rose approximately 5 basis points to around 4.39%

US 10-year Treasury yield rose approximately 5 basis points to around 4.80%, its highest level since January 2025

(AP, Reuters)

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News

1) US launches fresh strikes on Iran as tanker attacks drive oil and inflation risks higher

* The US launched a new round of airstrikes against Iranian targets near the Strait of Hormuz.

* President Trump warned that Iran would face even stronger attacks if it continued to retaliate.

* Iran subsequently launched counterattacks, raising concerns that the conflict could enter a prolonged cycle of retaliation.

* Two supertankers carrying Saudi crude were struck by unidentified projectiles while leaving the Strait of Hormuz. Each vessel was carrying approximately two million barrels of oil, but no casualties were reported.

* The US is reportedly considering regular military strikes and naval escorts to maintain access to the southern shipping lane. However, Iran’s parliamentary speaker said Tehran would not accept a route opened unilaterally by the US.

* Brent crude rose around 4.6% to US$94.65 per barrel, while WTI crude climbed approximately 5.2% to US$90.22, after gaining nearly 6% intraday.

* Diesel crack spreads exceeded US$100 per barrel, indicating that the supply squeeze is affecting not only crude oil but also refining capacity and refined products such as diesel.

* Treasury Secretary Scott Bessent said Middle Eastern oil producers could eventually bypass the strait by expanding overland pipelines, although this would require considerable investment and several years to complete.

(Reuters: Tanker attacks, Reuters: US strikes)

Market impact: Higher oil prices are increasing inflation and rate-hike concerns, placing pressure on airlines, cruise operators, transportation companies and high-valuation technology stocks, while benefiting energy companies.

Positive counterpoint: Neither tanker attack resulted in serious casualties. If naval escorts restore shipping flows, overland oil exports increase or US-Iran negotiations resume, part of the geopolitical risk premium in oil prices could unwind quickly.

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2) Global bond sell-off intensifies as Japan’s 10-year yield crosses 3% for the first time in 30 years

* Japan’s 10-year government bond yield surpassed 3% for the first time since 1996, reflecting investors’ demand for greater compensation against inflation and fiscal risks.

* Higher oil prices, a weaker yen and rising import costs strengthened expectations that the Bank of Japan could raise interest rates again in September.

* Japan plans to increase investments in semiconductors, AI and other strategic industries. However, government debt exceeding 200% of GDP has intensified concerns about fiscal sustainability.

* The US 10-year Treasury yield rose to around 4.80%, while long-term German, French and UK government bond yields also reached multi-year highs.

* Apart from energy-driven inflation, fiscal deficits, heavy government bond issuance and financing requirements for AI data centres are contributing to higher long-term borrowing costs.

* Federal Reserve Governor Michael Barr said the Fed should raise rates decisively if inflation does not cool sufficiently. However, he also said policymakers could take more time if inflation resumes its decline towards the 2% target.

* Despite the sharp rise in Japanese yields, government bond auctions continued to record relatively healthy demand, suggesting insurers and pension funds are beginning to find current yields attractive.

(Reuters: Japanese government bonds, Federal Reserve: Barr’s speech)

Market impact: Rising risk-free yields reduce equity valuations, particularly for technology, real estate and highly leveraged companies, while increasing financing costs for businesses and households.

Positive counterpoint: Higher yields improve the long-term attractiveness of bonds. If upcoming employment or inflation data weaken, yields could decline and bond prices could recover.

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3) US manufacturing remains in expansion, but hiring becomes more cautious

* The US ISM Manufacturing Index declined from 55.6 in July to 54.6 in August, below expectations of approximately 55.3 but still comfortably above the 50-point expansion threshold.

* Manufacturing activity has expanded for eight consecutive months and remains near its highest level in almost four years.

* New orders continued to grow, although at a slower pace. Weaker backlogs and imports suggest that some companies are becoming more cautious about future demand.

* The Middle East conflict, higher oil prices and tariffs continue to create elevated input costs and supply-chain uncertainty for manufacturers.

* US JOLTS job openings reached 7.271 million in July, up from June’s downwardly revised 7.182 million but slightly below market expectations, marking a second consecutive monthly miss.

* Hiring declined from 5.332 million in June to 5.054 million in July, indicating that companies are becoming more cautious about expanding their workforce.

* Layoffs remained low, while the ratio of job openings to unemployed workers was approximately 1.1, indicating a relatively balanced “low-hiring, low-firing” labour market.

(Reuters: ISM Manufacturing, US Bureau of Labor Statistics: JOLTS)

Market impact: The data provide a mixed signal for equities. Economic growth remains resilient but is losing some momentum, giving the Federal Reserve more room to focus on controlling inflation.

Positive counterpoint: Companies are not conducting large-scale layoffs, and manufacturing activity remains in expansion. If hiring cools gradually without causing a sharp increase in unemployment, the US economy could still achieve a soft landing.

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4) Nvidia deepens its AI ecosystem strategy through MediaTek and Anthropic agreements

* Nvidia invested US$3.5 billion in MediaTek convertible bonds, becoming the largest participant in MediaTek’s US$3.9 billion overseas convertible-bond issuance.

* MediaTek will adopt Nvidia’s NVLink Fusion and NVHBM technologies to help cloud providers develop customised AI chips that can connect directly with Nvidia’s platform.

* The investment allows Nvidia to extend its influence beyond GPU sales into custom chips, connectivity technologies and memory interfaces—the core components of an AI factory.

* The partnership will also cover AI PCs and automotive chips, helping Nvidia expand its architecture beyond the data-centre market.

* Anthropic separately signed an approximately US$35 billion computing agreement with Nvidia-backed AI cloud provider Lambda to support the growth of Claude and Claude Code.

* The computing capacity will come from an approximately 350-megawatt data centre in Texas. The facility is being developed by Hut 8, while Nvidia reportedly holds the data-centre lease.

* Because Nvidia invests in AI customers, cloud providers and supply-chain companies while also benefiting from their chip purchases, investors are again focusing on circular-financing risks, customer payment capacity and transaction transparency.

(Reuters: MediaTek investment, Reuters: Anthropic computing agreement)

Market impact: In the near term, increasingly complex cross-investments may heighten concerns about the sustainability of AI capital expenditure and circular financing, creating valuation volatility for Nvidia.

Positive counterpoint: The US$35 billion computing agreement and MediaTek partnership show that AI demand continues to expand. Nvidia is evolving from a GPU supplier into an ecosystem platform connecting chips, cloud computing capacity and AI customers.

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Daily Focus

* Major news: Monitor further US-Iran military actions, shipping security in the Strait of Hormuz and whether Brent crude remains above US$90 per barrel.

* Major US data: August ADP private employment, July factory orders and the Federal Reserve’s Beige Book.

* Market focus: The ADP report will provide an important labour-market signal ahead of Friday’s nonfarm payroll report. The Beige Book will offer insight into how oil prices, tariffs and AI investment are affecting economic activity and inflation.

* US technology earnings after market close: Broadcom (AVGO), Snowflake (SNOW), Hewlett Packard Enterprise (HPE) and NetApp (NTAP). Broadcom’s AI semiconductor revenue, custom-ASIC orders and forward guidance will be the main focus.

(Broadcom Investor Relations, Snowflake Investor Relations)