U.S. markets were closed on Monday, September 7, for the Labor Day holiday, leaving Wall Street on the sidelines as the standoff between the United States and Iran over the Strait of Hormuz intensified. Brent crude climbed toward $97 a barrel and Saudi Arabia’s Jizan refinery was struck for the second time in a month, while European and Asian equities traded with a mix of caution and opportunism. With the S&P 500, Dow and Nasdaq dark for the session, overseas markets offered the clearest read on risk appetite heading into a shortened trading week.

Oil Extends Its Climb Toward $97

Brent crude for November delivery traded near $97 a barrel on Monday, up roughly 9% over the prior five sessions and about 19% for the month, approaching levels last seen in late July. West Texas Intermediate rose to $92.27, a six-week high, as traders weighed the risk of further disruption to Gulf shipping. The advance followed a weekend in which U.S. forces struck three Iranian oil tankers and Iran’s Revolutionary Guard said it hit three tankers along with three U.S.-linked vessels elsewhere in the region, the latest exchange in a conflict that has kept a persistent risk premium in energy markets since the summer.

Aramco Refinery Hit as Hormuz Traffic Thins

Adding to supply concerns, Saudi Aramco’s Jizan refining complex was struck for the second time in a month, according to reports citing people familiar with the matter, raising questions about how quickly the facility can return to full production. The Strait of Hormuz normally carries roughly a fifth of global crude exports, and shipping through the waterway has slowed to an average of about ten commodity vessels crossing per day over the past ten days, well below typical levels. Iran has said a deal with Oman to establish a temporary safe route through the strait is in its final stages, though details on timing and scope remained unconfirmed heading into the new week.

European and Asian Markets Diverge

With Wall Street closed, European benchmarks finished mixed. London’s FTSE 100 added 0.2% to close at 14,666, France’s CAC 40 rose 0.33%, while Germany’s DAX slipped a marginal 0.04%. Asian trading was more decisive. Japan’s Nikkei 225 jumped 2.12% to 66,399.84 on renewed optimism around AI-related demand, with SoftBank Group, Kioxia and Advantest among the session’s biggest gainers. South Korea’s Kospi surged 4.61% to 6,995.39 and China’s CSI 300 added 0.59%, while Hong Kong’s Hang Seng bucked the regional trend, falling 0.93% to 25,413.12.

Gold Slips as Fuel Costs Climb for Consumers

Gold eased 0.62% to $4,404.98 an ounce, as a firmer dollar and expectations for continued Fed vigilance offset some of the usual safe-haven demand tied to Middle East risk. The energy rally is also filtering through to consumers, with U.S. gasoline prices rising to a national average of $4.15 a gallon, up from $4.08 a week earlier and roughly 39% higher than in late February, while diesel reached a record $5.90 a gallon nationally. With the Federal Reserve’s September 15-16 meeting approaching under Chair Kevin Warsh, traders head into the rest of the week watching both the Hormuz standoff and incoming inflation data for further direction on rates.

Daily market analysis by BCM Markets.