Key facts
- Crude oil prices rose Monday morning due to escalated military action between the U.S. and Iran.
- Brent crude reached nearly $80 per barrel before paring gains.
- Tanker traffic data indicates the Strait of Hormuz remains open.
- South Korea's KOSPI index, heavily weighted with memory chip stocks, fell nearly 9%.
- SK Hynix experienced its largest single-day stock price drop on record.
Crude oil prices saw an early rise on Monday morning as tensions between the U.S. and Iran escalated following military actions over the weekend. Brent crude jumped to nearly $80 per barrel before settling around $78, a response considered restrained given the circumstances.
Conflicting claims emerged regarding the status of the Strait of Hormuz, a critical shipping lane. Iran asserted it had closed the strait, while U.S. President Donald Trump stated it remained open. Ship-tracking data from Kpler indicated a significant drop in transits last week, with only six vessels passing through on Sunday, the lowest in five weeks, supporting the view that traffic has been impacted.
In equity markets, semiconductor stocks continued their recent downturn. South Korea's chip-heavy KOSPI index closed down nearly 9%, falling below 7,000 for the first time since early May and re-entering bear market territory. This decline was significantly influenced by a record-breaking drop of over 15% in memory chipmaker SK Hynix.
Global equities showed caution, with Wall Street futures trading lower and European shares opening down. Investors are anticipating a busy week ahead, marked by the start of second-quarter earnings season, including a significant number of bank reports on Tuesday. The U.S. consumer price inflation data for June, particularly the core measure, will also be closely watched for insights into underlying price pressures, especially following recent hawkish signals from the Federal Reserve.