Oil climbs as Middle East fighting rattles markets, AI stocks drag Wall Street lower
Renewed tensions around the Strait of Hormuz lift crude prices, while technology shares retreat amid concerns over lofty artificial intelligence valuations
NEW YORK (MNTV) — Global oil prices rose sharply on Monday after renewed military tensions in the Middle East heightened concerns over disruptions to energy supplies, while losses in major artificial intelligence-related technology stocks weighed on U.S. and Asian equity markets.
Brent crude, the international oil benchmark, climbed about 4.5% to around $79 per barrel as escalating tensions surrounding the Strait of Hormuz raised fears over the security of one of the world’s most important oil shipping routes.
Market sentiment deteriorated after both the United States and Iran asserted control over the strategic waterway, where recent hostilities have disrupted tanker traffic carrying crude oil from the Persian Gulf to global markets. The renewed uncertainty has fueled concerns over higher energy costs and inflation worldwide.
Oil prices briefly approached the $80-per-barrel mark after U.S. President Donald Trump announced the reinstatement of a blockade on Iranian vessels in the Strait of Hormuz and proposed a 20% fee on cargo transiting the waterway to help cover the cost of U.S. security operations in the region.
Despite the latest gains, Brent crude remains well below the highs recorded during earlier phases of the conflict.
On Wall Street, investor sentiment weakened as technology stocks extended recent declines. The S&P 500 slipped about 0.4%, the Nasdaq Composite lost nearly 0.9%, and the Dow Jones Industrial Average also traded lower.
Semiconductor companies linked to the artificial intelligence boom led the market decline. Micron Technology fell more than 4%, trimming part of its strong gains earlier this year, while Nvidia, the world’s most valuable publicly traded company, also declined, exerting significant downward pressure on broader market indexes.
Analysts said investors are becoming increasingly cautious that expectations surrounding artificial intelligence may have pushed technology stock valuations beyond levels justified by future earnings, prompting renewed profit-taking across the sector.
Selling pressure was also evident across Asian markets. South Korea’s Kospi index plunged nearly 9%, with memory chipmaker SK Hynix suffering one of the steepest declines after its recent U.S. stock market debut. Japanese and Chinese equity markets also closed lower.
Not all semiconductor companies shared the downturn. Taiwan Semiconductor Manufacturing Co. (TSMC) reported strong revenue growth for June and the first half of the year, reflecting continued demand for advanced chips, although its U.S.-listed shares also traded modestly lower.
Investors are now turning their attention to the U.S. corporate earnings season, with several of the country’s largest banks, including JPMorgan Chase, Bank of America, Citigroup, Goldman Sachs and Wells Fargo, scheduled to release quarterly financial results this week.
In bond markets, U.S. Treasury yields rose alongside oil prices as investors weighed the possibility that higher energy costs could reignite inflationary pressures, potentially influencing future interest-rate decisions by the Federal Reserve.
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