Oil prices rise after latest Middle East fighting escalates
Brent crude surged 7.8% to $81.92 per barrel after US and Iran claimed control over the Strait of Hormuz.
- Brent crude rose 7.8% to $81.92 a barrel after weekend Middle East strikes and competing control claims over the Strait of Hormuz.
- The U.S. and Iran each asserting control, plus a U.S. blockade announcement and proposed 20% transit fees, tightened tanker movements and lifted oil prices.
- Micron sank 4.9% after a 243% year-to-date surge; questions grow about whether AI-driven demand will sustain current valuations.
- TSMC reported 68% June revenue growth and 35.6% H1 growth; Taiwan shares rose, U.S.-listed shares fell 2.3%.
- Big U.S. banks report earnings this week — Bank of America, Citigroup, JPMorgan, Goldman Sachs, Wells Fargo.
- 10-year Treasury yield climbed to 4.62% from 4.56%; yields rose from ~3.97% before the conflict, signaling inflation and rate-hike concerns.
- Asian markets hit harder: Shanghai -2.1%, Nikkei 225 -1.9%; European moves were modest.
Oil climbed Monday after a weekend of strikes and heightened tensions in the Middle East, pushing energy costs higher while renewed selling in artificial-intelligence–linked chip stocks weighed on broader markets. The international benchmark, Brent crude, rose sharply — up 7.8% to $81.92 a barrel — as uncertainty around who controls the Strait of Hormuz and whether tankers can safely transit the passage sent traders seeking cover in fuel markets.
The spike followed competing claims from the United States and Iran that they had control over the strait, a critical chokepoint through which a large share of the world’s oil shipments pass. Fighting in the region has kept some tankers from using the waterway, tightening supply and amplifying fears of wider disruption. Prices jumped further after former President Donald Trump said he was reinstating a blockade of Iranian ships in the strait and proposed charging a 20% fee on all cargo transiting the area, saying such payments would reimburse the U.S. for providing protection. Even with the recent rally, Brent remains well below the wartime highs near $120 a barrel seen during past conflicts.
On Wall Street, investors wrestled with the energy-fueled price moves and fresh weakness in technology names tied to the AI boom. The Nasdaq, more concentrated in growth and tech firms, dropped 1.4% as some of the year’s biggest winners pulled back.
But investors are increasingly asking whether expectations have run too far ahead of reality, worrying that profits and productivity gains from AI may not materialize at the pace priced into these shares.
Not all chip-related names fell. Taiwan Semiconductor Manufacturing Co. reported a near 68% jump in June revenue from a year earlier, lifting its first-half revenue growth to 35.6% year over year. Shares in Taiwan rose, yet TSMC’s U.S.-listed shares eased 2.3%, illustrating the uneven response across markets as traders balance strong industry data against stretched valuations.
This week’s calendar looms large: major banks — including Bank of America, Citigroup, JPMorgan Chase, Goldman Sachs and Wells Fargo — are due to report quarterly results. If companies beat estimates by the typical margin, it would mark the second consecutive quarter of exceptionally strong year-over-year earnings gains and the best quarter since 2021.
The 10-year U.S. Higher yields reflect investor concern that central banks might need to raise interest rates to rein in inflation, a move that cools growth and can weigh on stock valuations.
Markets outside the U.S. felt the strain as well. European indexes moved modestly, but Asian markets saw sharper declines: Shanghai fell about 2.1%, Japan’s Nikkei 225 dropped 1.9%, and South Korea experienced steeper losses.