Oil prices jump over 3% as US Iran hostilities escalate near the Strait of Hormuz, while Asian stocks split and Wall Street's AI trade wobbles again.
Oil prices jumped more than 3% early Wednesday as renewed US Iran hostilities rattled markets, after American forces struck targets in Iran following attacks on three ships in the Strait of Hormuz.
Crude Snaps Back Toward War Era Highs
Brent crude, the global benchmark, climbed 3.2% to $76.54 a barrel, while US benchmark crude rose the same margin to $72.72. Both grades had recently drifted back down to levels last seen before the Iran conflict flared in late February, so the jump marks a sharp reversal. Prices remain well below the peaks above $100 a barrel hit during the height of the war, but the renewed violence has reintroduced a level of uncertainty traders thought had eased.
Ipek Ozkardeskaya of Swissquote noted that geopolitical headlines will likely dictate market direction in the near term, warning that any further escalation could pressure equity valuations at the same time technology stocks are already under stress.
Asian Markets Split as Tech Selloff Continues
Share trading across Asia was uneven. Tokyo's Nikkei 225 slid 1.2% to 67,426.47, and South Korea's Kospi tumbled 5.6% to 7,226.48. The Kospi had briefly topped 9,000 last month before heavy selling in AI linked names hit hard. Samsung Electronics fell another 6.7% Wednesday after dropping roughly 7% the previous session, while SK Hynix gave up early gains to close down 3.6%.
Taiwan's Taiex managed a 0.6% gain, and Hong Kong's Hang Seng jumped 2.9% to 24,178.30. The Shanghai Composite slipped 0.3% to 3,978.80. Australia's S&P/ASX 200 lost 0.5% to 8,764.70, and India's Sensex also fell 0.5%.
Zhipu Shares Soar as Lockup Fears Fade
Chinese AI startup Zhipu, also known as Z.ai and trading under the name Knowledge Atlas Technology, surged 14% in Hong Kong. A six month lockup period for cornerstone investors from its $558 million trading debut in January expires this week, and worries had circulated that the expiration might trigger heavy selling. State-owned China National Radio reported late Tuesday that nearly 70% of those cornerstone investors plan to hold their shares. Zhipu stock has now climbed more than 1,300% since it began trading in Hong Kong in January.
Wall Street's AI Trade Wobbles Again
The volatility in AI related stocks that has gripped Wall Street resumed Tuesday, pulling the broader market down even though most individual stocks in the S&P 500 actually rose. The index still fell 0.4% to 7,503.85. The Nasdaq composite dropped 1.2% to 25,818.69 as chip and AI names weighed heavily, while the Dow Jones Industrial Average slipped 0.2% from a record close to finish at 52,925.15.
Advanced Micro Devices sank 6.5%, Intel dropped 9.7% and Micron Technology lost 4.7%. SpaceX, parent of the xAI business, fell 6.8% in its debut session after joining the Nasdaq 100 index. Rivian Automotive slid 18.1% after announcing plans to sell 75 million new shares, a move that dilutes existing shareholders' stakes.
Currency Moves Stay Modest Despite the Turmoil
Currency markets showed far less drama than oil or equities. The US dollar edged up to 162.27 Japanese yen from 162.11, while the euro ticked higher to $1.1421 from $1.1414.
