Renewed US military strikes on Iranian targets triggered a sharp risk-off repricing across global markets on Tuesday, driving Brent crude up 4.60% to $94.65/bbl and WTI up 5.20% to $90.22/bbl — levels that materially alter the inflation calculus for every major central bank. The move compounded an already elevated yield environment: US 10-year Treasuries pushed toward 4.78–4.80% (20-month highs), Japan's 10-year JGB briefly touched 3% for the first time since 1996, and the VIX surged 9.52% to 16.34, signalling a meaningful deterioration in near-term risk appetite heading into September.

For European markets, the transmission is direct and broad-based. Eurozone August flash HICP had already printed at 3.3% YoY — a three-year high — before Tuesday's oil spike, with the energy component running at +14.3% YoY; the further leg higher in crude tightens the ECB's hand ahead of its September 10 meeting, where markets are pricing near-certainty of a 25bp hike. The Euro Stoxx 50 fell 0.80%, with the sharpest sector damage in Chemicals (-1.42%), Industrials (-1.19%), and Insurance (-1.04%), all sensitive to either energy input costs or discount-rate expansion. EUR/USD firmed 0.25% to 1.1618 — partly reflecting EUR-area rate-hike repricing — while GBP/USD was little changed at 1.3550, consistent with the FTSE 100's near-flat close (-0.03%) as London's heavy energy weighting partially offset the broader equity selloff. Cross-asset pressure is most concentrated in rate-sensitive European growth equities and high-debt industrials, where rising German Bund yields (10-year at 2.97%, though down 7.6bp on the session as safe-haven flows returned intraday) interact with elevated energy costs to squeeze margins from both sides.