Markets are heading into a period of heightened uncertainty as traders return from their August breaks, with high government debt and prolonged inflation adding to geopolitical and policy risks. The war with Iran has driven volatility in oil, gas, energy stocks and government bonds, while talks between Iran and Oman over management of the Strait of Hormuz are the immediate focus. Investors are also watching the Federal Reserve and Bank of Japan, which meet in the same week. Markets see about a 40% chance of a Federal Reserve hike at Chair Kevin Warsh’s September 16 meeting and expect a Bank of Japan hike on September 18; Japan’s 10-year bond yield is nearing 3%, its highest level since the mid-1990s. Anthropic’s potential initial public offering, reportedly seeking to raise as much as $100 billion, could test optimism around artificial intelligence valuations and affect Nvidia and Microsoft if investor appetite weakens. France’s budget battle, German state elections, Britain’s October budget and Labour Party Conference, and the U.S. November midterms could add pressure to government borrowing costs. In the United States, gasoline prices have risen above $4 a gallon on average from below $3 in January, and Treasury Secretary Scott Bessent’s efforts to lower borrowing costs are linked by some analysts to the midterm elections.