U.S. futures slip and yields climb as Iran rebuff revives war premium
S&P 500 futures fell about 0.5% and Nasdaq 100 futures about 1% in premarket trading Monday after President Trump rejected Iran's latest Strait of Hormuz reopening plan, while Brent jumped about 4% to near $108.50 a barrel and the 10-year Treasury yield advanced to about 5.23%. Traders kept pricing at least one more Federal Reserve rate hike by year-end, with October odds near two in three, as energy costs feed inflation worries.
AI-assisted · US Brief desk · Sources listed below
What happened
U.S. equity futures and global bonds sold off in trading early Monday after President Donald Trump rejected Iran's latest proposal to reopen the Strait of Hormuz, denting Friday's deal-hope optimism while oil regained a war premium and rate-hike bets stayed firm.
What the tape showed: As of about 7 a.m. ET, futures for the S&P 500 Index were down about 0.5% and Nasdaq 100 futures had dropped about 1%, according to CNBC market data. Brent crude was up about 4% near $108.50 a barrel after trading at $107.75 (+3.3%) in Asian hours, Reuters reported, and West Texas Intermediate rose about 4% to near $96.30. Shorter-maturity Treasuries led losses, with the two-year yield up about six basis points to 4.92% and the 10-year up about five basis points to 5.23%, erasing Friday's decline. Gold futures fell about 3% near $4,190 an ounce as higher-rate prospects weighed on non-yielding metals. In Asia's completed session, MSCI's broadest index of Asia-Pacific shares outside Japan eased about 0.6%, Reuters reported; South Korea's Kospi fell 2.7% to 6,889.74 on its return from the Chuseok holiday, Yonhap reported, and the Shanghai Composite lost about 1.7% and Japan's Nikkei about 0.7%, while Hong Kong's Hang Seng rose about 0.5%, per CNBC market data.
The diplomatic catalyst: Trump rejected Tehran's seven-day Hormuz reopening plan on Saturday after Iran sought sanctions relief, an end to the U.S. naval blockade, and a broader ceasefire up front, U.S. Ambassador to the United Nations Mike Waltz told CNN's State of the Union. Waltz said the White House wants confidence that talks would end Iran's nuclear program. Trump told Axios he still expects more U.S.–Iran talks this week, arguing Tehran "overplayed" its hand; Iran has said its conditions stand and that only negotiations can break the deadlock.
Why it matters
Elevated energy costs keep inflation pressure on the Federal Reserve. Traders are pricing roughly a 65%–68% chance of another 25-basis-point hike in October and about 92% odds of at least one more by year-end after this month's first increase since 2023, according to CME FedWatch data cited by Reuters and market wires. Cleveland Fed President Beth Hammack has pointed to resilient growth, a strong labor market, and government-debt concerns as reasons long-term yields stay high. Treasury Secretary Scott Bessent struck a more dovish note, saying policymakers should keep an "open mind" on rates if AI productivity and deregulation help contain inflation. Last week the average yield on a gauge of global bonds climbed above 4% for the first time since 2007.
What’s next
Watch the U.S. cash open for confirmation of the overnight moves, any official follow-up on Iran talks via Qatar, physical Hormuz flow updates, and the inflation and employment reports later this week.
More context
Caveats: Premarket prints can reverse before the New York cash open. Oil, futures, and yield levels cited above are snapshots from about 7 a.m. ET, not settlements. A Qatari-mediated counteroffer or verified change in Hormuz shipping risk could reprice both energy and rate expectations quickly. This week's Federal Reserve preferred inflation gauge and U.S. jobs data remain the next domestic catalysts for the hike path.
8 listed sources
- Bloomberg via SWI swissinfo, Sep 28, 2026: Asia markets wrap — futures, yields, oil, gold
- The Edge Malaysia, Sep 28, 2026: oil up, U.S. equity futures slip after Iran offer rejected
- Axios (as cited); Mike Waltz on CNN State of the Union / India Today, Sep 28, 2026: Trump rejection rationale; talks still expected this week
- CNBC market data (quotes), Sep 28, 2026, about 6:50–7:00 a.m. ET: S&P 500 and Nasdaq 100 futures, Brent, WTI, 2- and 10-year Treasury yields, gold futures, Asia closes
- Reuters, Sep 28, 2026: Brent crude at 0540 GMT; CME FedWatch October hike odds (as carried by Moneycontrol and The Sunday Guardian)
- Reuters (Sydney markets wrap via MarketScreener), Sep 28, 2026: MSCI Asia-Pacific ex-Japan index
- Yonhap via The Korea Herald, Sep 28, 2026: Kospi close
- CME FedWatch, Sep 28, 2026: October and December Fed hike probabilities
References listed by US Brief; a source count is not a verification score.
Editorial sourcing notes
Market figures refreshed at publish time (about 4 a.m. PT / 7 a.m. ET, Sep 28, 2026): U.S. stock futures, Brent and WTI, 2- and 10-year Treasury yields, gold futures, and Shanghai/Nikkei/Hang Seng closes follow CNBC market data (quotes timestamped about 6:50–7:00 a.m. ET). Reuters reported Brent at $107.75 (+3.29%) at 0540 GMT; Reuters' Sydney markets wrap reported MSCI's Asia-Pacific ex-Japan index down 0.6%; Yonhap (via The Korea Herald) reported the Kospi close at 6,889.74 (−2.70%). Fed pricing: Reuters, citing CME FedWatch, put October hike odds at 68%; CME FedWatch data reported the same day showed 64.8% for October and about 92% for at least one more 25 bp hike by December. Levels move quickly and are not U.S. cash-session settlements; the earlier-draft Asia-open prints (Bloomberg/swissinfo; The Edge Malaysia) were superseded. Diplomatic facts (Trump rejection; Iran holding conditions; talks possibly this week) follow Axios reporting as cited by multiple outlets and Mike Waltz on CNN's State of the Union.
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