Global stocks slipped on Monday as investors braced for details of new U.S. sanctions on Iran, while elevated bond yields, uncertainty over U.S. interest rates and mounting expectations around Nvidia’s earnings kept investors cautious.

The market is entering a week dominated by three interconnected risks: the potential impact of tougher sanctions on global oil supplies, whether Nvidia can sustain the extraordinary growth expectations surrounding the artificial intelligence boom, and whether Federal Reserve Chair Kevin Warsh will provide any signal on the path for U.S. interest rates.

European shares were down about 0.1% in early trading, while S&P 500 futures fell 0.2% and Nasdaq futures declined 0.7%. Asian markets also weakened, with South Korea’s technology-heavy Kospi among the notable decliners.

The immediate focus was on U.S. Treasury Secretary Scott Bessent, who was due to outline Washington’s new sanctions on Iran later Monday. The announcement comes as Tehran continues to control access to the Strait of Hormuz, a critical route for global oil shipments.

Oil prices fell more than 1% ahead of the announcement as traders took some profits following last week’s rally. Brent crude had gained more than 5% last week as hopes for a rapid reopening of the waterway faded.

The market is particularly sensitive to whether the new U.S. measures target Chinese companies or financial institutions involved in Iran’s oil trade. Any sanctions that restrict China’s ability to purchase Iranian crude could have broader implications for global supply flows and oil prices.

Iran’s foreign minister has dismissed the threat of new sanctions as a sign of desperation, while the prospect of a prolonged disruption around Hormuz continues to complicate the outlook for energy markets.

“The big news this week will be Nvidia earnings,” said Mark Ellis, chief investment officer at Nutshell Asset Management. “The tone of that might drive sentiment into the Nasdaq.”

Nvidia’s results on Wednesday will provide the clearest near-term test of whether the extraordinary investment in AI infrastructure is continuing to translate into revenue at the world’s leading supplier of AI processors.

Analysts are generally expecting quarterly revenue of about $92 billion, almost double the level a year earlier, with full-year earnings expectations in the range of $103 billion to $105 billion.

The numbers alone may not be enough to satisfy investors.

Nvidia has become one of the main beneficiaries of the AI investment boom, but its valuation now incorporates exceptionally strong expectations for data-center spending by Microsoft, Amazon, Alphabet, Meta and other technology companies.

That makes the company’s outlook at least as important as its latest results. Any indication that hyperscalers are slowing their spending, that demand for AI processors is becoming constrained by power or data-center capacity, or that customers are seeking greater efficiency could quickly affect the broader technology sector.

The sensitivity was evident in Alibaba’s shares, which fell about 9% in Hong Kong after the Chinese technology company announced a $10.2 billion share sale to finance its AI expansion. Investors appeared concerned about how quickly Alibaba will be able to generate returns from the enormous capital spending required to build AI computing capacity.

Samsung Electronics also fell more than 8% after announcing a shareholder-return plan worth about $79 billion that failed to satisfy investors expecting a larger distribution of the cash generated by the semiconductor boom.

The moves highlight a growing tension in technology markets. AI-related companies continue to attract enormous investment, but shareholders are becoming increasingly focused on the cost of that investment and the speed at which it translates into earnings and cash returns.

Bond Markets Remain The Bigger Macro Risk

Beyond technology and oil, the bond market remains a major source of uncertainty. U.S. Treasury yields have retreated slightly on Monday, with the 10-year yield around 4.71% and the 30-year yield around 5.25%. Both had climbed sharply last week even after the Treasury announced plans to increase purchases of longer-dated government bonds.

The Treasury said it would at least double its long-end buybacks to $4 billion per operation, seeking to ease pressure on longer-maturity bonds after the 30-year yield approached a 19-year high of 5.34%.

The initial response was short-lived.

The problem is the sheer scale of the Treasury market. The proposed purchases are small relative to the roughly $32 trillion market for U.S. government debt, leaving investors questioning whether the intervention can materially change the supply-demand balance.

The deeper concern is fiscal.

U.S. government debt has surpassed $40 trillion, while the federal budget deficit remains above 6% of GDP and annual interest costs have risen to roughly $1.2 trillion.

Higher long-term yields increase the cost of financing that debt, creating a difficult feedback loop. Larger interest payments can increase borrowing requirements, which can put further upward pressure on bond yields.

The pressure is not limited to government finances. Higher long-term yields raise borrowing costs for households and businesses and increase the discount rate applied to future corporate earnings, potentially putting pressure on stock valuations.

That is particularly relevant for technology companies spending hundreds of billions of dollars on AI infrastructure.

Goldman Sachs analysts said the Treasury’s attempt to support longer-duration securities could leave the dollar as the “remaining release valve” needed to encourage foreign capital to finance the U.S. current-account deficit.

That dynamic is already visible in currency markets.

The dollar remains near multi-month lows, while gold has continued to rise. Gold gained another 0.8% to about $4,640 an ounce and is up roughly 15% this month.

The weakness in the dollar is being driven by several forces at once, including concerns about U.S. fiscal policy, uncertainty surrounding monetary policy, and expectations that the Treasury’s intervention in bond markets could alter the relationship between yields and the currency.

Jackson Hole Becomes The Next Major Test

Investors are now looking toward Warsh’s speech at the Federal Reserve’s annual Jackson Hole symposium on Friday.

Markets want greater clarity on the outlook for U.S. monetary policy, but economists warn that they may not get it.

“There are several reasons to expect to be underwhelmed,” said Bruce Kasman, chief economist at JPMorgan, noting that Federal Reserve chairs have historically avoided using Jackson Hole speeches to pre-commit to specific policy decisions.

Instead, Kasman expects Warsh to focus on his broader “regime change” agenda, potentially including the Fed’s balance sheet.

That could still matter for markets.

Investors are now focused on the interaction between monetary policy, Treasury borrowing and the supply of long-dated government debt. Any comments from Warsh on the Fed’s balance sheet, Treasury issuance or the term premium could have a greater effect on long-term yields than conventional economic data.

“Any comments on the balance sheet, duration supply, or term premium could move the long end more than the data itself,” said Geoff Yu, a strategist at BNY.

The Federal Reserve’s policy outlook remains uncertain. Markets currently imply roughly a 40% probability of a rate increase at the September 16 meeting and fully price a move by December.

That pricing could change significantly depending on this week’s inflation data. Investors will be watching the July core personal consumption expenditures price index, the Fed’s preferred inflation measure, as well as updated economic growth figures.

The central bank faces an increasingly difficult environment. Inflation remains above its target, the U.S. economy continues to show resilience, and long-term Treasury yields remain elevated. At the same time, financial markets are already dealing with the effects of high government borrowing costs.

Canada Becomes Another Source of Market Tension

The Canadian dollar also weakened as trade tensions with the United States escalated. The currency fell about 0.3% in Asian trading after Canadian Prime Minister Mark Carney said Ottawa would retaliate with tariffs of its own after trade talks with Washington broke down.

Canada plans tariffs on U.S. steel, dairy products, appliances, agricultural equipment, pulp and paper and electronics, among other goods. The United States has imposed 50% tariffs on Canadian goods, and Ottawa’s retaliation raises the risk that the dispute will further disrupt North American supply chains.

The Canadian dollar has therefore become another market expression of broader concerns about trade policy and its potential inflationary effects.

Investors Face A Week Of Overlapping Risks

The combination of geopolitical uncertainty, high bond yields, aggressive AI investment and unresolved monetary-policy questions leaves markets vulnerable to sharp moves.

Oil traders are waiting to see whether U.S. sanctions on Iran materially restrict supplies or merely intensify existing restrictions. Equity investors are looking to Nvidia for evidence that the AI investment boom remains intact. Bond investors want to know whether the Treasury and Federal Reserve can contain upward pressure on long-term borrowing costs.

At the same time, investors are questioning whether the enormous capital expenditure associated with AI can generate returns quickly enough to justify current valuations.

That makes Nvidia’s earnings a spectacle. A strong result with an upgraded outlook could bolster the AI-led equity rally. A weaker outlook could expose how much of the technology sector’s valuation depends on continued acceleration in AI infrastructure spending.

The market therefore enters the week with little room for disappointment. Oil, bonds and AI are operating as separate sources of risk, but their effects overlap. Higher oil prices could reinforce inflation, persistent inflation could keep interest rates higher, higher rates could push up Treasury yields, and higher yields could put pressure on the valuations of the technology companies driving the stock market.