Indian Stock Market Next Week: Oil Prices, US Jobs Data, Bond Yields to Drive Dalal Street

September 6, 2026

Mumbai: The Indian stock market is likely to remain sensitive to global developments next week, with crude oil prices, US jobs data, rising bond yields and foreign investor flows expected to influence market sentiment.

Renewed tensions between the US and Iran, uncertainty over the reopening of the Strait of Hormuz and changing expectations around US interest rates could keep volatility elevated.

Sensex, Nifty end higher but give up gains

The benchmark indices ended higher on Friday but surrendered most of their intraday gains and closed near the day’s lows following the closing auction session (CAS).

The Sensex gained 363 points to close at 76,515, while the Nifty rose more than 24 points to finish below the 23,898 mark.

The broader market remained mixed. The Nifty Midcap 100 slipped into negative territory, while the Nifty Smallcap 100 managed to end in the green.

Crude oil prices emerge as key concern

One of the biggest concerns for investors heading into the new week is the renewed rise in crude oil prices.

Oil prices gained around 8 per cent during the week after the US and Iran exchanged strikes following a month-long lull. The development revived concerns over possible supply disruptions as the Strait of Hormuz remains shut for oil transit.

The prolonged disruption has also led to a reassessment of crude price expectations. Citi has raised its average Brent crude price forecast for the third quarter to $86 a barrel from its earlier estimate of $80, citing expectations that the reopening of the Strait of Hormuz could take longer than previously anticipated.

Higher crude prices could put additional pressure on inflation and corporate costs in oil-importing economies such as India. Investors are therefore likely to closely track developments in the Middle East and any indications about when normal oil shipments through the strategic waterway could resume.

Rising bond yields, US jobs data add to uncertainty

Another major concern is the sharp rise in global bond yields. A bond-market selloff on a scale not seen in decades has pushed yields across several major economies to multi-year highs.

Markets are currently dealing with a combination of oil-driven inflation, expectations of tighter monetary policy and deteriorating fiscal conditions.

Higher crude and fuel costs have increased inflationary pressures while also pushing up government borrowing costs globally. Investors are also assessing whether tighter financial conditions could weigh on economic growth if inflation does not ease meaningfully.

US monetary policy expectations could add another layer of volatility. A stronger-than-expected US jobs report has brought the possibility of a September interest-rate hike back into focus, creating a difficult policy choice for Federal Reserve Chair Kevin Warsh amid pressure from US President Donald Trump for lower borrowing costs.

US employers added 162,000 jobs in August, almost three times the number expected by economists. The labour force participation rate also increased to 61.6 per cent, while the unemployment rate remained at 4.1 per cent.

With global oil prices, bond yields, US monetary policy expectations and foreign investor flows all in focus, Indian equities could remain volatile in the coming week.