US Treasury Secretary Scott Bessent announced the "toughest sanctions in history" on Iran during a press conference on August 24, calling it "the single greatest financial offensive ever marshaled against an adversary" [1, 2]. The announcement prompted a drop in global oil prices, with Brent crude falling about 1-1.3% to roughly $93.17 per barrel and West Texas Intermediate crude declining around 1.3% to between $85.7 and $86.14 per barrel [2, 3, 1, 4].
Stock markets in the US and Asia also declined. Technology stocks led losses, with Nvidia shares dropping 2.4% to 2.9%, the S&P 500 falling 0.3%-0.4%, and the Nasdaq sliding 0.7%-1.1%. The Dow was mostly flat or slightly up [5, 6, 7, 8, 9]. Market watchers await Nvidia’s earnings report on August 26, with expectations it will nearly double quarterly revenue to about $92 billion and guide full-year revenue between $103 billion and $105 billion [6, 10, 11]. Marta Norton, chief strategist at Empower, said Nvidia shares "have become a frothy space" but noted this does not mean fundamentals are challenged [7].
The sanctions escalate tensions with Iran, which condemned the US measures and urged diplomatic solutions amid internal leadership divisions. Analysts said the split between Iran's pragmatic and hardline factions could determine escalation or de-escalation in the coming days. Tony Sycamore, an IG markets analyst, said, "By the end of this week, we will have a good idea which side has the upper hand" [2]. Vivek Dhar, a commodities analyst, warned the risk of increased violence could unsettle energy markets [2].
US 30-year Treasury yields remain elevated, recently just above 5%, near a 19-year high reached last week. The US Treasury had announced plans on August 19 to double bond buybacks aimed at stabilizing yields [6, 10, 11]. Federal Reserve Chair Kevin Warsh is scheduled to speak at the Jackson Hole economic symposium on August 28, with investors seeking clues on interest rate policy amid Treasury market volatility. JPMorgan chief economist Bruce Kasman expects Warsh to emphasize shrinking the Fed’s balance sheet [6, 8].
BIMB Securities assigns a 20% chance of a worst-case Iran-US escalation pushing Brent above $100, a 55% chance of gradual normalization with Brent between $85 and $100, and a 25% chance of a comprehensive settlement with Brent falling between $75 and $85 [12]. The coming days will be closely watched for signs of how Iran’s leadership handles the sanctions and for market responses ahead of Nvidia’s report and the Fed speech.
