FISG Daily Market Wrap 1 September 2026

Global markets entered September under pressure as rising inflation concerns pushed bond yields higher and strengthened expectations for a Federal Reserve rate hike this month.

The US 10-year Treasury yield climbed to 4.78%, its highest level since January 2025, while Japan‘s 10-year yield reached 3% for the first time since 1996. Markets now price in around a 65% probability of a September Fed rate hike, up sharply from 34% before Chair Kevin Warsh’s Jackson Hole comments.

Higher energy prices added to inflation concerns as Brent crude rose 1.2% to around $91.55 a barrel amid escalating tensions in the Persian Gulf and growing risks around the Strait of Hormuz. Gold fell 0.3% to approximately $4,425 an ounce as rising yields reduced demand for non-yielding assets.

Equity markets remained relatively resilient. MSCI‘s Asia Pacific index gained 0.3%, while Taiwan led regional gains. MediaTek surged 9.9% following Nvidia’s announced $3.5 billion investment in the chipmaker.

Overall, markets face a challenging mix of higher-for-longer interest rates, elevated bond yields and renewed geopolitical risks. Investors should expect continued volatility across bonds, equities, currencies and commodities.