Higher oil prices weigh on equities ahead of US key inflation data

US equity markets closed lower on Tuesday as a sharp rise in energy prices weighed on expectations for corporate profit margins and heightened the risk of tighter interest-rate policy, with traders also bracing for key inflation data due later in the week. The S&P 500 slipped 0.58%, the Nasdaq Composite eased 0.32% and the Dow Jones Industrial Average shed 628 points. Underpinning the move in oil, escalating hostilities between the US and Iran stoked fears of prolonged disruptions to fuel exports.

In the meantime, borrowing costs for US companies climbed amid hawkish signals from the Bank of Japan (BoJ) and expectations that Japanese investors may sell US Treasuries to support the yen. Credit-sensitive software names came under pressure, with Microsoft down 1.10%, Palantir falling 2.30%, and Amazon losing 0.60% ahead of its sterling bond offering, as artificial intelligence (AI)-focused companies have increasingly tapped foreign-currency debt markets in the face of surging dollar bond supply linked to AI investment. Oracle, by contrast, gained 2.40% ahead of its earnings release this week.

Asian markets were also mixed, weighed by rising global energy prices and ongoing currency and interest-rate pressures. Japan’s Nikkei 225 fell 1.70% to 65 269 as the yen strengthened and investors positioned for a potential BoJ rate increase, including selling in export-heavy sectors. In China, the Shanghai Composite rose 0.20%. In Hong Kong, the Hang Seng Index declined 0.38%.

European equities were mixed as investors continued to assess the implications of higher energy prices and further monetary tightening. The Euro STOXX 50 rose 0.10% to 6 413, while the STOXX Europe 600 was flat at 649.60. The DAX 40 was virtually unchanged at 26 008, while the CAC 40 gained 0.10% to 8 318. Technology stocks were mixed, with Infineon falling 3.70% in Germany, while industrial and energy shares provided support in France. The UK’s FTSE 100 followed the European trend closing largely unchanged, with losses across pharma, consumer and banking stocks offset by stronger commodity-related shares.

South Africa’s economy contracted by 0.20% on a seasonally adjusted quarter-on-quarter basis in 2Q26, according to data released by Statistics South Africa on Tuesday. The decline ended a run of six consecutive quarters of growth and came alongside a downward revision to first-quarter GDP, which was adjusted from 0.50% to 0.40%.

Despite the growth print, local equities managed a modest advance. The FTSE/JSE All Share Index gained 0.40% to close at 117 461.57, underpinned by a 0.77% rise in Financials, while Metals and Mining slipped 0.84%. In currency markets, the rand traded slightly weaker at 21h32, down 0.11% trading at R16.00 against the greenback.

On the commodities front crude oil climbed back to rough $94 per barrel on Tuesday, reaching it highest level in three months as concerns over potential supply disruptions intensified across the Middle East. Adding to pressure on prices, Iran announced it would establish a new shipping corridor with Oman through the Strait of Hormuz requiring vessels to coordinate with Tehran to enter a newly declared restricted maritime zone and raising concerns about potential delays at one of the world’s most critical oil chokepoints. In the meanwhile, at 21h13 SAST Brent crude rose by 1.69% to $98.64 per barrel after topping $99 earlier in the session as concerns over supply disruptions intensified. According to Reuters, Brent crude has climbed to the cusp of $100 a barrel at very early hours of 9 September, a level last seen in late July 2026.

Precious metals: gold fell 0.91% to $4 364.49 per ounce, while silver declined 0.43%.