Brent crude tops $91 on Iran strikes as AI tech sell-off deepens
Asian equities faced renewed pressure on Monday as surging oil prices from escalating US-Iran military strikes collided with a deepening rout in semiconductor stocks.
Asian equities faced renewed pressure on Monday. The selling was driven by surging oil prices following escalating US-Iran military strikes and a deepening rout in semiconductor stocks.
Brent crude jumped 3.8% to trade above $91 a barrel, hitting its highest level in over a month. The spike followed a ninth consecutive night of US military strikes against Iran on Sunday. The campaign aims to degrade Tehran's capacity to target commercial shipping in the Strait of Hormuz, placing severe strain on an already fragile ceasefire.
The sudden oil price shock is rippling through other asset classes. Gold fell 0.5% to drop below $4,000 an ounce, extending losses from the previous week. Silver and platinum also declined as higher energy costs reinforced expectations that central banks will keep interest rates elevated to combat inflation, draining demand for non-yielding precious metals.
Concurrently, the technology sector is grappling with its own fundamental reassessment. A key semiconductor stock index has entered bear market territory as investors question the massive capital expenditures required for artificial intelligence. This scepticism persists even as corporate earnings and underlying AI demand remain robust, with the VanEck Semiconductor ETF shedding nearly 9% last week.
These dual headwinds weighed heavily on regional indices. South Korea's Kospi fell 0.74% at the open, while the tech-heavy Kosdaq dropped 1.66%. Australian markets bucked the trend, with the S&P/ASX 200 adding 0.34%, while Japanese exchanges were closed for a public holiday. Hong Kong's Hang Seng index futures pointed to a flat open at 24,602, marginally above Friday's close of 24,562.24.
US equity futures signalled a muted start to the trading week. S&P 500 futures dipped 0.1%, Nasdaq-100 futures hovered near the flatline, and Dow Jones Industrial Average futures lost 84 points. The lacklustre pricing follows heavy losses on Wall Street last week, where the Nasdaq Composite tumbled 2.9%, the S&P 500 fell 1.6%, and the Dow slipped 0.9%.
