Global Markets Under Pressure as Trump Rejects Hormuz Proposal and Yields Surge

Monday, September 28, 2026 | Daily briefing on Hormuz oil shocks, soaring bond yields, tech valuation pressures, and Bitcoin’s quarterly strength.

Daily Summary

Our View: With Trump rejecting Iran’s Hormuz proposal, oil has rebounded to $107, and we are starting the week with weak risk appetite. From a data perspective, this is one of the busiest weeks of the year: Wednesday brings the PCE, Thursday the ISM, and Friday the non-farm payrolls; all three will directly impact October rate hike pricing. Today, we expect selling pressure to persist in equities, the dollar to hold above 101, weakness to continue in gold due to rising real yields, and bitcoin to test the $83,800–$84,000 support. Tomorrow, the Reserve Bank of Australia is expected to raise rates to a 15-year high; this will be the latest example that no central bank can ignore the energy shock anymore. The key development to watch is that the market is not pricing in any rate cuts until mid-2028.

Trump rejected Iran’s proposal, and Brent crude climbed to $107. Tehran had proposed at the UN to open the Strait of Hormuz for seven days, halt the conflict, and then hold comprehensive talks. Trump did not rule out the possibility of a new strike before the midterms; according to the WSJ, he expects bombing to resume after the elections. Talks will continue this week.

Oil is up 17-18% in September, with diesel at record highs. Refinery capacity constraints have pushed the diesel crack spread to $75; the historical average is $15. This increases the risk of inflation embedding itself into pricing and wage decisions.

The 30-year yield is at its highest since 2004: 5.5173%. It has risen 27 basis points this month, while the 2-year is up 55 basis points. The 10-year is at 5.18-5.20%. The market is no longer pricing in any rate cuts until mid-2028.

The economy is running fast: the Atlanta Fed projects 5.0% growth for this quarter. JPMorgan Chief Economist Kasman states that the global expansion has entered a broad-based strength phase rarely seen in the past two decades. The probability of an October rate hike by the Fed is 65-68%, with 90 basis points priced in for this cycle.

Wall Street closed last week with gains. The S&P 500 rose 1.2% and the Nasdaq 2.1%, marking their best week since early August, while the Dow broke a three-week losing streak. Meta gained 13%. This morning, futures are down 0.4-0.7%.

China is at a one-year low. The CSI 300 dropped 1.9-2.2% to its lowest level in a year; August industrial profits showed the weakest growth of the year at 4.2%, and US lawmakers introduced a bill banning Chinese-made components in AI data centers. The KOSPI fell 2.4%.

Gold dropped 2.2-2.5% to $4,192–$4,214. Intra-month losses have exceeded 4%; rising yields continue to hit non-yielding assets. Silver fell 3.4%.

Bitcoin stands at $83,300 but is closing the quarter with a 42% gain, outperforming all major assets including the Nasdaq and gold. The scale of the Bitget hack has grown to $387.5 million; the hacker moved $83 million worth of unfreezable XRP on the XRP Ledger.

Story of the Day

Hormuz Proposal Rejected

Iran submitted a proposal last week at the UN General Assembly delivered via Qatari mediation: the Strait of Hormuz would reopen for seven days, the conflict would halt, and broader talks would subsequently begin. On Saturday, Trump announced he rejected the proposal, stating that Iran is seeking a deal because it is under heavy pressure; on Truth Social, he emphasized that Iran cannot possess a nuclear weapon. In a Sunday interview with Fox News, he stated he expects the war to end “very soon,” but declined to rule out new military strikes before the midterms: “I don’t want to say that. I mean it’s possible, but I don’t want to say it.” He added that the US will win the war through both military and economic pressure. The Wall Street Journal reported Saturday, citing unnamed US officials, that Trump told aides he expects bombing to resume after the November midterms. In response, Trump told Axios on Sunday that talks will continue this week. Iranian Foreign Minister Abbas Araghchi stated that his country is “fully prepared” for renewed conflict and could even withstand a potential “doomsday war.”

Market reaction is direct: Brent rose 2.7-3.3% to over $107, bringing its September gain to 17-18%, while WTI rose 1.8-2.3% to $94.2–$94.6. Sugandha Sachdeva, founder of SS WealthStreet, says the rejection diminishes hopes of an immediate breakthrough, but diplomatic efforts are not over; according to her, $120 is the critical resistance for Brent, and unless prices sustain themselves above that level—especially if shipping improves or talks progress—a pullback is possible. On the supply side, the picture is actually improving: according to Kpler preliminary data, crude oil exports by major Middle Eastern producers rose to 12.8 million barrels per day in September, the highest level since the war began in February; Saudi Arabia and the UAE increased shipments, and transit through Hormuz is approaching 7.4 million barrels per day this month as Riyadh diverted exports from Yanbu on the Red Sea to the Ras Tanura port in the east following attacks on the East-West pipeline. Reuters’ morning note points to the political consequence of this improvement: more crude and products coming out of the Gulf may encourage Trump to maintain a wait-and-see position. The real issue is not crude oil, but refined products: refinery capacity bottlenecks have driven diesel prices to record levels, with the diesel crack spread reaching $75, compared to a historical average of $15. This increases the risk of inflation embedding itself in pricing and wage decisions, making it increasingly impossible for central banks to “ignore” the energy shock.

The New Neutral Rate, Which Is Actually an Old Neutral Rate

The most important conceptual development of this week is taking place in the bond market and is related to its composition rather than price action. The 30-year Treasury yield is near its highest level since 2004 at 5.5173%, having risen 25-27 basis points this month alone; the 2-year has jumped 55 basis points this month on expectations of a Fed rate hike. Most of the increase in the 30-year stems from the term premium, essentially returning bonds to where they stood before the 2008 global financial crisis. Reuters’ framework boils this down to a single sentence: this is why central bankers everywhere are talking about a new, higher neutral rate, and the level they are discussing looks quite similar to that of the 1990s. The most striking change in pricing is in the term structure: markets no longer price in any rate cut probability until mid-2028. Bank of America interest rate strategist Mark Cabana says he sees room for continued selling in bonds and that repricing may not stop until clear evidence emerges that financial conditions have become sufficiently restrictive.

The side of this that contradicts the economy is that the data is exceptionally strong. The Atlanta Fed’s GDPNow gauge projects 5.0% growth for this quarter; activity in Asia and Europe is also vibrant, partly thanks to the AI investment boom. JPMorgan Chief Economist Bruce Kasman says the global expansion has entered a broad-based strength phase rarely seen in the past two decades, and the continuation is important: against the backdrop of strong growth and entrenched perceptions of resilience to high energy prices, it is not surprising that interest rates are rising and stock prices remain near records; what is most striking in recent market movements is that high policy rates are being extended far beyond next year. Ed Yardeni of Yardeni Research reminds us of the flip side of the coin: the rapid rise in 2-year yields globally indicates that major central banks must raise policy rates further to counter the inflationary impact of high oil prices resulting from the re-escalation of the Middle East war, but these high rates simultaneously worsen the outlook for large budget deficits worldwide.

The most tangible bill for rising yields is landing on AI investment. JPMorgan estimated in June that $4.1 trillion in AI-related debt would be issued through 2030; as data center companies and other firms tied to this boom return to the debt market to build capacity, they are now facing a 10-year yield up about one point since the beginning of the year at around 5.17%, meaning they must offer more attractive yields to lure investors. The market is not yet in a panic, but this rise both increases corporate borrowing costs and raises the discount rate applied to earnings; meaning the two pillars of the AI theme—revenue expectations and financing costs—have begun working against each other for the first time.

Central Banks Wait Their Turn, Australia Next

The persistence of the energy shock is prompting central banks to act one after another, with Australia up next. The Reserve Bank is expected to raise rates by 25 basis points tomorrow to 4.60%, near a 15-year high; this could be the final hike in the tightening cycle. Last week, Norway made a surprise hike, and Sweden signaled follow-through by year-end. On the Fed front, futures price a 65-68% probability of a second consecutive hike at the October meeting and about 90 basis points of tightening through the end of next year. This week’s data calendar will be the test of this pricing: Wednesday brings the PCE index (the Fed’s preferred inflation gauge), Thursday the ISM manufacturing survey, and Friday the September non-farm payrolls report. Payroll expectations stand at an increase of 85,000, with the unemployment rate holding at 4.1%, and a potential dip to 4.0%. Today features the release of the Dallas Fed manufacturing survey, along with speeches from the Fed’s Bowman, Cook, and Barkin, the ECB’s Lagarde, the BoE’s Ramsden, and two deputy governors from the Norges Bank. Data released in Japan this morning makes the BOJ’s job easier: the services producer price index rose 3.7% year-on-year in August, the fastest pace since June 2024, boosted by freight, advertising, and rental costs. The BOJ raised rates to a 31-year high of 1.25% this month, and Ueda has signaled readiness to raise borrowing costs further to prevent inflation from overshooting the target.

Market Round-Up

Equities

Wall Street closed last week with gains despite yields surging to multi-year highs: the S&P 500 rose 1.2% and the Nasdaq Composite 2.1% for their best week since early August, while the Dow gained 0.3% to break a three-week losing streak. Leadership is in tech: Meta surged 13% over the week driven by the Muse effect, Microsoft gained over 4%, and Apple and Nvidia added more than 1%. At Friday’s close, Microsoft rose 3.7% to $516, and Apple rose 1.5% to $341, both in upward trends; Meta fell 3.3% to $752, though its monthly gain remains at 30.6% with an RSI of 71 in overbought territory. AMD stands at $631 with a 31.1% monthly gain and an RSI of 73. This morning, futures are down: Dow down 0.4%, S&P down 0.4%, and Nasdaq 100 down 0.7%; renewed oil gains are creating pressure. Another notable development is in investor composition: according to Vanda Research data, retail investors who have been buying for years are stepping aside, while institutional investors are maintaining stock positions in the face of the yield surge; Vanda’s Viraj Patel writes that institutional investors have proven surprisingly resilient through this week’s macro volatility.

Asian markets are mixed and weak on Monday: MSCI Asia-Pacific ex-Japan slipped 0.6%. China is the weakest link: the CSI 300 dropped 1.9-2.2% to a one-year low, and Shanghai lost 2%; there are two reasons. First, August industrial profits showed their weakest growth of the year at 4.2% year-on-year, slowing for the fourth time following April’s 24.7% pace, pressured by weak domestic demand and rising energy costs. Second, a group of US lawmakers introduced a bill on Friday banning Chinese-made components used for data transmission in AI data centers across federal government sensitive systems, hitting tech stocks. In South Korea, the KOSPI dropped 2.4-2.5% to 6,902 following a two-day holiday. Japan’s Nikkei ended flat at 66,184. Hong Kong’s Hang Seng moved in the opposite direction, rising 0.5-0.65%, led by energy and tech gains. India’s Nifty fell 1.3% and the Sensex 1.4%, maintaining a weak trend with an RSI of 35; Australia’s S&P/ASX 200 is flat but oversold with an RSI of 31. European futures are positive: Euro Stoxx 50 up 0.3%, DAX up 0.2%, FTSE up 0.2%, and the Stoxx 600 gained 0.5% last week, breaking a three-week negative streak. In France, the far-right National Rally and its allies achieved their best result ever in weekend Senate elections with 14 seats; though a small number in the 348-seat Senate, the alliance has reached enough senators for the first time to form a political group in the upper house. The BIST 100 is flat, up 0.09% at 12,899; the monthly loss is 11.5%, and it remains in oversold territory with an RSI of 32.

Foreign Exchange

The dollar index is in the 101.12–101.39 range, near a two-month high and heading to close September with a 1.7-2% gain, its best month since June. OCBC FX strategist Sim Moh Siong says that if tensions in the energy market persist and inflation risks continue to build, the dollar could overshoot in the near term, though the bank’s base case is a measured dollar rally toward year-end. The euro is near a two-month low at 1.1382–1.1386, down 2% in September, with an RSI of 25 in oversold territory. Sterling sits just above a three-year low at 1.3237–1.3247; BoE Governor Andrew Bailey reiterating warnings of rate hikes provided some support, but like the euro, its RSI is down to 25. The yen is at 157.64–157.75; Finance Minister Satsuki Katayama and Treasury Secretary Bessent reiterated the two countries’ intention to strengthen cooperation to address yen weakness, and Katayama stated that Trump expressed concerns over yen weakness. This was the source of Friday’s recovery, which was partially unwound today. The Australian dollar is at 0.7012–0.7022 ahead of tomorrow’s decision, and the New Zealand dollar is at 0.5668–0.5670. USD/CHF is at 0.8309 with an RSI of 69, and USD/CAD is at 1.4153 with an RSI of 73, both in uptrends. The offshore yuan strengthened slightly to 6.714; despite lasting three days, the Trump-Xi summit produced no public breakthrough on contentious topics. USD/TRY hit a new high at 48.98, with an RSI of 94.

Commodities

Oil is rising due to the political stalemate outlined above: Brent rose 2.7-3.3% to $107–$107.75, and WTI rose 1.8-2.3% to $94.2–$94.6. Brent closed last week up only 0.4%, but WTI lost 7.9% amid concerns over a diesel export ban; the spread between the two benchmarks therefore remains wide. ANZ analysts write that refined products remain a pinch point, with record US diesel prices intensifying inflation risks and reigniting debate over export restrictions, which would tighten supply outside the US. Brent has closed above $100 for three weeks. Precious metals moved in the opposite direction and sharply: gold dropped 2.2-2.5% to $4,192–$4,214, with its intra-month loss exceeding 4% and an RSI of 43; as a non-yielding asset, it is a direct target of rising real rates. Silver fell 3.4% to 62.05, palladium fell 2.4% to $1,234 and is in a bear trend, and platinum dropped 1.7% to $1,744. Copper is down 0.5% at $6.66, maintaining its uptrend though pressured by Chinese data. Natural gas fell 2.3% to $3.12, with its weekly gain dropping to 7.3%. In grains, wheat is flat at 697, and cocoa at 5,603. A corporate note: Australian gold producer Northern Star rejected a $27 billion takeover bid from South Africa’s Gold Fields on the grounds that it undervalues the company, sending its shares up over 9%.

Crypto

Bitcoin started the week weak: down 1.3-1.5% at $83,244–$83,324, with ether at $2,656, XRP at $1.49, and Solana at $119 seeing similar losses. The direct trigger is Trump not ruling out the possibility of new strikes and a 0.7% drop in Nasdaq futures. In contrast, in the broader picture, bitcoin is this year’s strongest asset: it is heading to close the third quarter with a 42% gain, outperforming all major assets including the Nasdaq and gold. Since the war began in early March, the 10-year yield has risen 127 basis points to 5.20%, the highest since 2007; bitcoin dropped at the beginning of the year, but staged a strong recovery in Q3, shaking off these uncertainties. Vikram Subburaj, CEO of India-based exchange Giottus, notes that the $83,800–$84,000 zone is an important near-term support for investors, while the $85,000–$85,800 range is an immediate resistance region, adding that it would be prudent to avoid chasing the rally from current levels; he states that keeping leverage limited and entering gradually can help manage volatility while reacting to ETF flows, Treasury yields, and incoming US inflation data. Among altcoins, ENA remains the strongest name despite a 1.7% drop, with a 23% weekly and 64% monthly gain, deep in overbought territory with an RSI of 80; AVAX is up 46% monthly at $10.67, and Solana and ether have entered uptrends.

The scale of the Bitget hack has grown, and the recovery problem has become clear. The exchange raised its total theft estimate on Friday to $387.5 million; the increase stems from Zcash and TRON transfers missed in initial accounting and is not a new attack, but reflects assets taken during the same breach. The attacker split roughly 103 million XRP stolen on Thursday into five accounts; by Saturday noon, two accounts initially holding 20 million XRP each had dropped to about 23 and 55 tokens, while a third fell to 5.8 million XRP. Approximately $83 million worth of XRP was moved, while $75 million remains in unfreezable accounts. The root of the problem is the network’s design: the XRP Ledger allows companies to freeze tokens issued on top of it, but this authority does not cover XRP itself, and even Ripple has no built-in way to prevent the attacker from spending these coins. Recovery therefore depends on where the money goes: an exchange receiving stolen XRP can restrict the buyer’s account and block withdrawals, but cannot freeze the coins as long as they sit in the attacker’s wallet. A comparative lesson: Circle and Tether, the backers behind USDC and USDT, have already frozen roughly $320,000 in stablecoins linked to the breach thanks to blacklist controls in their tokens. Bitget’s protection fund is covering the loss and customer balances were not affected; bitcoin withdrawals will reopen today, ether on September 29, USDT on September 30, and other tokens on October 2.

Second Story: Buterin’s 2030 Ethereum Will No Longer Work Like a Blockchain

Ethereum co-founder Vitalik Buterin stated in a Sunday post titled “The Cryptographic World Computer” that the network he envisions for 2030 might still be called a blockchain, but it will operate very differently from today’s. A computer fully auditing Ethereum today repeats the calculations behind transactions: checking whether the sender has sufficient balance and whether the application’s rules allow what it is doing. This repetition keeps the network honest, but also means adding computers doesn’t automatically increase capacity, as each is busy auditing the bulk of the same activity. According to Buterin, new cryptographic tools can remove this constraint: one computer can process transactions and produce a short mathematical proof that it followed the rules, while others can verify this proof much faster rather than repeating all the work; separate point checks show that records remain accessible for anyone who wants to inspect them. Ethereum developers wanted to distribute work this way a decade ago, but failed; in Buterin’s words, the missing component was verification.

The plan also encompasses privacy and highlights a current weakness: checking a balance typically requires querying an outside server about an address, and the server operator can learn which accounts a person follows, even if payments are private. Buterin envisions that these queries will also be hidden, along with payment details and the rules the account uses for spending approval; this way, a company can keep its payments private without exposing its accounts every time an employee checks a balance. Similar goals exist elsewhere: Zcash already allows payments with encrypted addresses and amounts, and as of Friday, there were about 4.9 million ZEC in its shielded pools; researchers behind the Shielded Bitcoin study published Thursday propose borrowing Zcash’s payment design for bitcoin. Buterin’s timeline is also clear: the Hegota upgrade planned for next year will be Ethereum’s last “normal” fork—meaning the final upgrade built with technology familiar to someone running the network in 2015—while subsequent ones will increasingly lean on mathematical proofs, tools auditing software against bugs, and security relying on future quantum computers. “After Hegota, this transformation becomes Ethereum’s main story.” Projected outcomes include transaction finality in about 8-32 seconds; for complex applications, cost and privacy limitations will remain on the list even in 2030.

Levels to Watch

• PCE (Wednesday), ISM (Thursday), Employment (Friday): The week’s three tests. Employment expectations stand at 85k, with unemployment at 4.1%. If all three come in strong, October hike pricing will exceed 80%, bringing new highs in yields.
• Brent, 107 / 120: Current level and Sachdeva’s critical resistance. A pullback is possible unless sustainability above 120 is achieved; shipping improvements and Kpler’s 12.8 million barrel data support this direction.
• US 30-Year, 5.5173%: Highest since 2004. Most of the increase comes from the term premium, meaning bonds are returning to pre-2008 levels; according to Cabana, repricing may continue until evidence shows financial conditions are sufficiently tight.
• Bitcoin, 83,800–84,000 / 85,000–85,800: Subburaj’s support and resistance zones. Quarterly close with a 42% gain; ETF flows and PCE data will set the direction in the new quarter.
• Gold, 4,192: Intra-month loss exceeds 4% and is approaching the 200-day moving average. Recovery is difficult before real yields peak.
• Reserve Bank of Australia, Tomorrow: 25 bps hike to 4.60% is expected, which could be the last hike of the cycle. If a “final hike” message is not delivered, the Australian dollar will test the 0.70 support.

Calendar of the Week

Date	Day	Event
September 28	Monday	Dallas Fed manufacturing survey; Fed’s Bowman, Cook, and Barkin, ECB’s Lagarde, Elderson, and Machado, BoE’s Ramsden, Norges Bank’s Longva and Borsum speak; Bitget reopens bitcoin withdrawals
September 29	Tuesday	RBA rate decision (25 bps hike to 4.60% expected, could be the final hike of the cycle)
September 30	Wednesday	US August PCE inflation (Fed’s preferred gauge); China PMI data (ahead of one-week National Day holiday)
October 1	Thursday	US ISM manufacturing index
October 2	Friday	US September non-farm payrolls (expectation 85k, unemployment 4.1%); Eurozone inflation data
Late October	—	FOMC (hike probability 65-68%); market prices no rate cuts until mid-2028
November 3	—	US midterm elections; according to WSJ, Trump expects attacks on Iran to resume post-election