BANGKOK (AP) — Stocks were mixed in Europe and Asia and U.S. futures fell Monday on expectations that the U.S. Federal Reserve could raise interest rates soon. In early European trading, Germany’s DAX lost 0.9% to 26,339.04, while Paris’ CAC 40 fell 0.1% to 8,390.43. Markets in Britain were closed for a bank holiday. Futures for the S&P 500 and the Dow Jones Industrial Average fell 0.2%. Oil prices rose more than 3% after US forces attacked Iranian rocket launchers in the Strait of Hormuz, marking their first military action in a month. The Trump administration just days earlier had shifted its focus to economic pressure, and a return to open conflict would be dangerous for the region. Brent crude, the international standard, jumped 3.8% to $91.40 a barrel early Monday. US benchmark crude oil was trading 3.8% higher at $86.58 per barrel. “The Middle East had finally calmed down enough for oil traders to start taking some of the war premium off crude. Then came Sunday, with a reminder that tranquility in the Strait of Hormuz is not the same as peace,” Stephen Innes of SPI Asset Management said in a commentary. Markets in Asia fell following a speech Friday by Federal Reserve Chairman Kevin Warsh that reinforced expectations that the U.S. central bank will do what is necessary, such as raising rates, to reduce inflation despite potential short-term pain for the economy. In Tokyo, the Nikkei 225 lost 0.1% to 66,311.93, while South Korea’s Kospi reversed earlier losses and gained 0.5% to 6,820.02. Hong Kong’s Hang Seng lost 0.1% to 25,566.99 and the Shanghai Composite Index gained 0.9% to 3,986.30. Shares of e-commerce and fast fashion giant Shein will begin trading in Hong Kong on Tuesday in the city’s biggest initial public offering this year, part of a trend towards large companies founded in China raising funds in Chinese markets. An official survey released on Monday showed Chinese factory activity remained in contraction for the second straight month in August, although there were slight improvements in some areas such as new export orders and production. Elsewhere in the region, Australia’s S&P/ASX 200 lost 0.2% to 9,076.00 points. Subscribe to Morning Wire: Our flagship newsletter breaks down the day’s biggest headlines. Taiwan’s Taiex fell 0.4% and India’s Sensex fell 0.4%. On Friday, the S&P 500 fell 0.2% and the Dow industrials fell less than 0.1%. The Nasdaq composite fell 0.5%. In what is seen as a big move for the bond market, the two-year Treasury yield, which closely tracks expectations about the Federal Reserve’s actions, jumped to 4.35% from 4.22% just before Warsh’s speech at an annual economic symposium in Jackson Hole, Wyoming. Concerns had been growing that his tough talk about reducing inflation to the Federal Reserve’s 2% target might be just that. The Federal Reserve could raise short-term interest rates to control price increases, but it also might be reluctant to do so because that would slow the economy and hurt investment prices. US President Donald Trump, who appointed Warsh, has emphasized that he wants lower interest rates. Warsh was again adamant Friday that he wants to give financial markets fewer clues about what the Fed plans to do with rates for its twin jobs of keeping inflation low and the labor market strong. But he also said that “short-term interest rates are the predominant tool” for the Federal Reserve to do its job. In other trading early Monday, the US dollar fell to 159.75 Japanese yen from 160.10 yen. It has recovered after falling for a period following a rare coordinated intervention by the US Treasury and Japanese regulators in late July. The euro rose to $1.1601 from $1.1580.
