Global equities recovered on September 2, 2026, after several sessions of weakness, even as markets remained focused on the escalating conflict between the United States and Iran and on fresh movement in currencies, bonds and oil.
MSCI’s gauge of stocks across the world rose 0.10 per cent after ending lower for the previous three sessions, reflecting a modest relief rally rather than a decisive change in sentiment. In the United States, major indexes all moved higher: the Dow Jones Industrial Average gained 289.55 points, or 0.55 per cent, the S&P 500 rose 45.54 points, or 0.60 per cent, and the Nasdaq Composite added 130.03 points, or 0.50 per cent. The move came after a shaky start to September, when higher bond yields and renewed geopolitical fears had weighed on risk appetite.
The main market backdrop remained the conflict in the Middle East. Investors were still reacting to a day in which the U.S. launched airstrikes against Iran, prompting Iranian attacks on U.S. targets in the region and deepening the most serious escalation in weeks. Oil prices firmed modestly on concern that the conflict could disrupt energy supplies further. U.S. crude rose 0.62 per cent to $90.79 a barrel.
Currency markets showed a separate burst of volatility. The Japanese yen strengthened 0.92 per cent to 158.72 per dollar, although the report said it was not immediately clear what prompted the move. The yen had already retraced part of the gains it had made after a rare joint intervention by the United States and Japan at the end of July. The currency move came against a broader backdrop of investor concern about persistent inflation risks, central bank policy and the durability of the global recovery.
Bond markets were also in focus. U.S. Treasury yields eased from multi-year highs, with the benchmark 10-year note yield slipping 0.2 basis point to 4.794 per cent after touching 4.818 per cent earlier in the session, the highest level since November 1, 2023. The report said the climb in borrowing costs across major economies had intensified concern about tighter monetary policy and worsening fiscal conditions. In Japan, the 10-year government bond yield remained above 3 per cent for a second straight session after hitting a three-decade high earlier in the week.
The market’s near-term attention also shifted to policy expectations. Traders had recently increased bets on another Federal Reserve rate hike, with CME Group’s FedWatch tool putting the probability of a 25-basis-point increase at roughly two-thirds, up from 37 per cent a week earlier. Investors were waiting for upcoming U.S. economic data, especially the monthly jobs report due on Friday, ahead of the Fed’s September 15-16 meeting. The European Central Bank and the Bank of Japan were also on the calendar, with traders looking for clues about how far major central banks might tighten policy in response to inflation.
A market strategist quoted in the report described the session as a relief rally after prior underperformance. That framing fit the broader tone across asset classes: equities bounced, but yields, oil and foreign exchange all suggested that investors were still pricing a world marked by geopolitical tension and less predictable monetary policy.
For now, the session looked less like a clean return to risk-taking than a pause in the recent selloff. The day’s gains in stocks were real, but they sat alongside higher oil prices, an unusually active Treasury market and a yen move large enough to draw attention on its own. That combination pointed to markets that were stabilizing, not calming.
