Key facts
- Oil prices surged due to intensified fighting in the Middle East and concerns over the Strait of Hormuz.
- Brent crude climbed to over $84 a barrel, and US benchmark crude rose 1.4% to $79.20.
- Asian shares declined, with technology and AI-related stocks experiencing significant losses.
- US share futures indicated further drops, following losses in major US indices on Monday.
- China reported a 27% surge in exports for June, driven by AI demand for computer chips.
Oil prices climbed early Tuesday as fighting intensified in the Middle East, with Brent crude reaching over $84 a barrel and US benchmark crude up 1.4% at $79.20. The surge follows a nearly 10% jump in Brent crude on Monday and comes amid heightened uncertainty over the stability of supplies from the Persian Gulf, as both the US and Iran asserted control over the vital Strait of Hormuz. The US launched further strikes on Iran after President Donald Trump announced Washington was reinstating a blockade on the strait.
Asian shares declined, with Tokyo's Nikkei 225 losing 1% and South Korea's Kospi falling 3.2%. The Shanghai Composite index dropped 0.8%, despite official data showing China's exports surged 27% in June, boosted by AI-driven demand for technology goods. Hong Kong's Hang Seng edged up 0.1%, while Australia's S&P/ASX 200 shed 0.5%.
On Wall Street, US share futures indicated further losses, following a downturn on Monday where the S&P 500 fell 0.8%, the Dow Jones Industrial Average dropped 0.3%, and the Nasdaq composite sank 1.6%. Chip stocks, including Micron Technology and Nvidia, led the decline, with Micron falling 4.4% and Nvidia down 3.5%. Concerns are mounting that AI-related stock valuations have become unsustainable.
This week, market attention is also focused on corporate earnings reports. Major banks including Bank of America, Citigroup, JPMorgan Chase, Goldman Sachs, and Wells Fargo are set to release their quarterly results. Analysts anticipate overall growth of 23.6% for S&P 500 companies, which would mark the second consecutive quarter of growth exceeding 20%.