US-Iran Strikes in Hormuz Lift Oil; Markets Eye CPI for Fed Clue

Iran said it targeted three oil tankers and several US-linked vessels in the Strait of Hormuz over the September 5-6 weekend, prompting a 0.5 percent rise in Brent crude. The Islamic Revolutionary Guard Corps also reported striking a US naval drone and an unmanned surface vessel attempting to enter the strait.

Asian equity-index futures pointed higher at Monday's open, while US stock futures were mixed on Tuesday as investors weighed the geopolitical risk against a shortened trading week. The yen hovered around 156 per dollar.

“A Sep 16 Fed funds rate hike hinges on Friday's US August CPI print.”

Stronger-than-expected US jobs data on Friday lifted bets on a Federal Reserve rate increase at the September 16 meeting. Traders now focus on the August CPI report due Friday; a hot reading would "all but seal a September hike," said Elias Haddad of Brown Brothers Harriman.

Iran's top security official, Mohsen Rezaee, announced a new restricted zone would be declared outside the strait in coming days. Separately, Iranian officials warned the nation "will take action against any threat, even before it is carried out" in response to a US ballistic-missile upgrade.

Canada's retaliatory tariffs on US goods took effect just after midnight Tuesday after trade talks collapsed last month, adding another layer of uncertainty for markets already facing Middle East tensions.