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US strikes lift oil, chip jitters hit stocks

Oil prices jumped on Wednesday after the US launched new strikes against Iran following attacks on commercial vessels near the Strait of Hormuz, raising concerns that a fragile ceasefire in the Middle East could unravel and add to inflationary pressure. Equity sentiment was already under strain after Samsung’s results fuelled renewed doubts about elevated artificial-intelligence valuations, sending US and European stock markets lower on Tuesday. Most Asian markets were also trading in the red on Wednesday, with semiconductor-heavy indices under particular pressure. Investors will turn to the Federal Reserve’s meeting minutes on Wednesday for further clues on the interest-rate outlook.

  • Date
  • Author Shane Strowmatt, Senior Investment Writer
  • Reading time 5 minutes

Iran map

Brent crude oil climbed to USD 76.58 per barrel and West Texas Intermediate (WTI) rose to USD 72.74 after the US launched new strikes against Iran. The US military said the action followed Iranian attacks on three commercial ships near the Strait of Hormuz on Tuesday, raising the risk that last month’s fragile ceasefire could break down. The truce had allowed commercial shipping to resume through the key energy route after months of disruption, but the US-led Joint Maritime Information Center raised its threat level for vessels in the area to severe. The US Treasury also revoked a waiver on Tuesday that had permitted Iran to sell oil, adding to concerns about supply and inflation risks. The US dollar was little changed, with the Dollar Index holding around 101.10, while US Treasury yields increased, with the 2-year yield at 4.2% and the 10-year yield at 4.6%. Gold rose slightly, trading around USD 4120 per ounce.

Asian stocks slip as chipmakers lead losses

Most Asian equity markets moved lower on Wednesday as investors reassessed richly valued artificial-intelligence shares. South Korea’s KOSPI fell 5.7%, leaving it more than 20% below its June 19 record high. The sell-off was led by memory-chip makers, with Samsung Electronics falling about 6% and rival SK Hynix down 3% after sliding in the previous session, even though Samsung reported a record second-quarter profit. Investors were focusing on weaker-than-anticipated Samsung revenue and broader concerns that AI-driven valuations have become overstretched, while heavy leverage in chip shares and reports that Apple may turn to Chinese suppliers added to the pressure. Meanwhile, Japan’s Nikkei 225 lost 1%, and Australia’s S&P/ASX 200 dropped 0.5%. Hong Kong’s Hang Seng rose 1.1% and mainland Chinese shares were little changed.

US stocks retreat on chip weakness

The Dow Jones Industrial Average briefly reached another record high on Tuesday before ending 0.3% lower at 52,925.15 points, while the S&P 500 dropped 0.5% to 7503.85 points. Technology shares were weaker, with the Nasdaq 100 losing 1.8% to 29,173.02 points as semiconductor stocks slid after South Korean electronics and chipmaker Samsung failed to impress investors despite record earnings. Micron, Intel, Applied Materials and AMD fell between roughly 5% and almost 10%, as investors questioned whether artificial-intelligence demand can keep growing fast enough to support elevated valuations.

European stocks fall, Switzerland stays positive

The EuroStoxx 50 declined 1.2% to 6319.86 points on Tuesday, weighed down by sharp losses in technology shares. ASML fell 7.3% and Infineon dropped 8.3%, as investors questioned whether rising artificial-intelligence spending can generate sufficient returns, particularly when financed with debt. The Swiss SMI gained 0.4% to 14,360.45 points, supported by lower technology weightings and demand for defensive sectors such as pharmaceuticals and food.

Corporate and economic calendar

Corporate news in focus: There is no major corporate news scheduled today.

Economic data in focus: US crude oil inventories (16:30), Federal Reserve monetary policy meeting minutes (20:00).

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