Asian shares are mixed and oil prices surge after US strike on Iranian rocket launchers

Asian markets experienced a mixed performance on Monday after the United States launched military strikes against Iranian rocket launchers. The S&P 500 index fell by 0.3%, while the Dow Jones Industrial Average dropped 0.7% and the Nasdaq composite slipped 0.1%. The turmoil in the market continued as August ended with turbulence, following gains in both the S&P 500 and Nasdaq for the month after losses in July and June.

The Dow had managed five consecutive monthly gains, but Monday's losses were broad, with nearly all sectors within the S&P 500 ending in the red. However, energy stocks managed to gain, with Exxon Mobil up 2.7% and Chevron rising 2.1%. The market's focus remained on the U.S.-Iran conflict, with the U.S. strike on the Strait of Hormuz adding to the uncertainty.

Oil prices surged, with Brent crude rising 2.7% to $90.49 per barrel, while the national average for gasoline surpassed $4 per gallon for the first time ever in August. This surge in energy prices contributed to persistently high inflation, putting pressure on household spending and consumer confidence. The Federal Reserve faced a more complicated path ahead to address inflation, with expectations for a rate hike before the year's end.

The yield on the two-year Treasury remained steady at 4.34%, while the 10-year Treasury rose to 4.75%, reflecting market volatility ahead of the Federal Reserve's September inflation update.