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Happy Monday. Stocks were sliding and oil prices were surging after U.S. forces struck Iranian rocket launchers near the Strait of Hormuz on Sunday, marking their first military action in the region in a month.
Iran’s Revolutionary Guards Corps said Sunday that it targeted U.S. military bases in Jordan and the United Arab Emirates in retaliation for the American strikes on Iran.
Islamic Revolutionary Guard Corps forces were preparing to launch rockets and deploy sea mines into the Strait of Hormuz, said Captain Tim Hawkins, a spokesperson for U.S. Central Command.
“US forces are monitoring the area closely and remain prepared to protect the free flow of commerce through this essential waterway,” Hawkins said.
The attack comes just days after the Trump administration said it would shift its focus to increasing economic pressure — rather than military action — in an effort to end its war with Iran.
Stocks finished lower on Friday following a hawkish keynote address by Federal Reserve Chair Kevin Warsh at the Jackson Hole economic symposium.
“The Jackson Hole Symposium came with a hawkish Warsh, putting back into focus the September FOMC decision and the high risk of a rate raise at that meeting,” said Kyle Rodda, senior financial market analyst at Capital.com.
“Chairperson Kevin Warsh sounded much more like he did after his first press conference than his second, emphasizing the central bank’s commitment to getting inflation back to target – and, incidentally, the inflation target measured as it is now.”
Rodda said the reaction in financial markets was swift, with the heaviest selling found in assets tied to monetary policy expectations.
“Sentiment won’t be helped at all by geopolitical risk in the Middle East, a persistent headwind to risk assets recently, following reports of fresh military activity around the Strait of Hormuz,” he said.
“Meanwhile, market participants are looking ahead more nervously to US Non-Farm Payrolls data on Friday which is likely to be the highlight of the trading week amid heightened monetary policy uncertainty.”
The macroeconomic and geopolitical risks are outweighing the impact of an extraordinary U.S. earnings season, which saw Magnificent Seven companies deliver nearly 120% EPS growth, Rodda said.
This story was originally published by TheStreet on Aug 31, 2026, where it first appeared in the Stock Market Today section. Add TheStreet as a Preferred Source by clicking here.
