The United Arab Emirates has suspended all trade, commercial exchanges and financial transactions with Iran until further notice, adding to pressure on global markets as disruption in the Strait of Hormuz keeps oil prices high and rising US Treasury yields weigh on technology shares.
The decision was announced after regional escalations which, according to Afra Al Hameli of the UAE Ministry of Foreign Affairs, threaten peace and security. The UAE said it remained committed to dialogue, regional co-operation and the integrity of the international financial system, but the move marks a sharper separation between Gulf commercial interests and Iran while the confrontation continues.
US stocks fell for a second consecutive session on Tuesday, with technology companies bearing the brunt of the selling. The S&P 500 declined by about 0.6% to 0.7% to finish near 7,690-7,700, while the Nasdaq Composite dropped more than 1.2%. The Dow Jones Industrial Average was more resilient, falling approximately 0.15% to 0.22% into the mid-53,300s.
The PHLX semiconductor index fell by about 5%, while several major memory and chip companies lost between 7% and 9%. Investors have begun reassessing major spending on artificial intelligence, particularly as higher interest rates reduce the value of profits expected further into the future.
The S&P 500 remains more than 13% higher in 2026, despite being roughly 0.7% to 1% below its mid-August record of about 7,799. Energy shares were supported by expensive crude, while technology, communication services and consumer staples lacked the same protection.
Bond markets provided the clearest warning. The yield on the 10-year US Treasury traded at approximately 4.70%-4.74%, close to multi-month highs. The 30-year yield briefly reached 5.32%-5.33%, its highest level since 2007, before easing to about 5.28%-5.30% by the close.
Higher Treasury yields increase borrowing costs across the economy, affecting mortgages, corporate finance and the valuation of assets. Investors are also assessing high energy prices, a large July federal fiscal deficit and the steadily increasing US debt burden. Shorter-term yields, which are more closely linked to expectations for the Federal Reserve, remained in the low-to-mid 4% range and moved much less.
Oil remains central to the market outlook because shipping through the Strait of Hormuz is still far below normal. West Texas Intermediate crude traded near $84-$85 a barrel, while Brent crude remained above $90. About 20% of globally traded oil normally passes through the narrow waterway, meaning prolonged disruption could quickly add to inflationary pressure worldwide.
A 60-day US-Iran memorandum of understanding intended to restore freer shipping expired without a lasting agreement. Vessel traffic was sharply reduced at times, while further incidents maintained a geopolitical premium in crude prices. US diesel refining margins, known as the crack spread, reached record highs above $102 a barrel.
“Diesel is revealing the physical stress in the global energy system more clearly than WTI or Brent,” the X account Endgame Macro wrote this week. “Crude benchmarks are being restrained by weak global demand, expectations of eventual normalization, alternative Gulf export routes and continued releases from strategic reserves.”
Higher oil prices raise transport and production costs for households and companies. They may also limit the Federal Reserve’s ability to ease policy even if other areas of the economy weaken, helping explain why energy stocks attracted buyers while much of the wider market fell.
Gold and silver offered no straightforward safe-haven rally. Spot gold traded in the mid-$4,300s an ounce and silver was near $63-$64. Rising bond yields increased the opportunity cost of holding metals, offsetting some demand for protection.
Bitcoin traded at about $64,200-$65,000, while ethereum was near $1,900. Crypto markets were mixed to modestly higher by some measures but remained range-bound. Bitcoin had not produced a sustained geopolitical haven rally and was still well below its October 2025 record of just above $126,000. It has nevertheless diverged sharply from equities, disrupting some traditional market correlations.
The next major market move may depend on whether negotiations over the Strait of Hormuz produce a lasting arrangement. The UAE’s suspension of dealings with Iran adds further uncertainty, increasing pressure on Tehran and accelerating the division of trade and finance along geopolitical lines.
On Tuesday, Cypherpunk Technologies disclosed that it had launched a US-based zcash (ZEC) mining fleet with about 4.2 GSol/s of capacity.
