Oil prices fall as Bessent outlines new steps to punish Iran

Traders will also be watching this week’s annual gathering of central bankers, economists and finance chiefs in Jackson Hole in the United States, hoping for greater clarity on US monetary policy.

The meeting comes after Bessent said the US Treasury would buy back more of its own bonds to try to push down borrowing costs after the 30-year yield surged to levels last seen in 2007.

Those moves may be opposed by Federal Reserve Chairman Kevin Warsh because it complicates the Fed’s efforts to push down inflation, said Swiss Quote’s Ozkardeskaya. 

“That’s why Jackson Hole could be explosive,” she said.

Earlier, Asian markets were hit by a fresh wave of pressure on technology stocks, with investors awaiting Wednesday’s earnings report from Nvidia.

South Korea’s tech-heavy KOSPI fell more than 3 per cent, weighed down by a sharp drop in Samsung Electronics shares, and Tokyo and Shanghai also closed lower. 

On currency markets, the Canadian dollar fell 0.7 per cent against the US dollar, extending declines over the past month after Ottawa vowed to retaliate against new US tariffs after trade talks between the neighbours broke down.

“As a smaller, more open economy, Canada has more to lose from this, but Prime Minister Mark Carney seems to have opened the door to more fiscal stimulus to support affected business,” said analysts at ING.