Rising crude oil prices have kept Wall Street on edge, while a global bond sell-off has gathered pace as inflation fears mount across economies. The combination is renewing a familiar dynamic for markets: energy-driven price pressures complicate the outlook for interest rates at a time when central banks are still weighing whether inflation is sustainably on the way down.

US Markets | The S&P 500 was largely unchanged on Wednesday as elevated bond yields weighed on sentiment, while concerns over rising oil prices and their impact on inflation kept investors cautious. The S&P 500 traded 0.1% higher, while the Nasdaq Composite slipped 0.1%. The Dow Jones Industrial Average gained 187 points, or 0.4%. The mixed finish reflects a market caught between resilient heavyweight shares and rate-sensitive segments that struggle as borrowing costs climb.

US-Iran War | The US conducted a second day of strikes on the Islamic Republic overnight, with President Donald Trump threatening more attacks if Tehran responded. Within hours, Iran retaliated against Jordan, Bahrain and Kuwait — countries that host American forces. Tehran has also threatened tankers attempting to sail through the narrow waterway without authorisation, impeding energy exports from neighbouring oil-rich Gulf countries. The Strait of Hormuz, the narrow waterway at the centre of these threats, is one of the world's most important chokepoints for seaborne oil trade, which is why any disruption there resonates across global energy prices.

Crude Oil | Oil steadied near its highest closing level in five weeks as hostilities broke out again between the US and Iran, renewing the threat to energy exports from the Middle East. Global benchmark Brent traded under $95 a barrel after surging 4.6% on Tuesday, while West Texas Intermediate was near $90. Higher crude prices feed through to petrol, shipping and production costs, making oil a key variable in upcoming inflation readings and, by extension, in expectations for central bank policy.

US International Trade Balance | Key US economic data due on Thursday include the US International Trade Balance for July and the ISM Services PMI for August. The US goods and services trade deficit stood at $73.3 billion in June, down from $77.6 billion in May. Meanwhile, the ISM Services PMI rose to 54.1 in July from 54.0 in June, remaining in expansion territory. Readings above 50 indicate expansion, so the services sector data will offer a fresh check on whether the largest part of the US economy is still growing.

Earnings | Global earnings due on Thursday include Dell Technologies, Lululemon, Campbell's, Ciena, DocuSign, UiPath, Zscaler and M&G PLC. Corporate results this week are a relative bright spot in the calendar, with demand for AI-related infrastructure and consumer spending patterns among the themes investors will be watching in these reports.

Yen | The yen strengthened sharply against the US currency, leaving traders hyper-vigilant for evidence that Japanese authorities may once again intervene in the foreign-exchange market. The Japanese currency rallied as much as 1.2% to 158.22 per dollar, a sharp move that put market participants on guard for signs that authorities were stepping into the market. Sharp yen moves also carry broader significance, as Japan's currency has been a key source of volatility in global carry trades, where investors borrow in low-yielding currencies to fund positions elsewhere.

Source: CNBC-TV18