Brent crude surges past $90 as U.S.-Iran strikes intensify

Asian equity markets opened under pressure on Monday as escalating hostilities between the United States and Iran sent Brent crude surging past $90 a barrel, compounding a bruising selloff in semiconductor and AI-related stocks that has erased trillions of dollars in market value over recent weeks.

Oil Spikes on Middle East Escalation

Brent crude climbed roughly 3% in early Asian trading to top $90 per barrel for the first time since mid-June, according to Reuters, after the U.S. military confirmed a ninth consecutive night of strikes against Iranian targets. The gains extended a 15.9% weekly rally — the sharpest since April — as conflict in and around the Strait of Hormuz continued to disrupt energy shipments. U.S. Central Command said on X that the strikes aimed to degrade "Iranian military capabilities used to attack commercial vessels and civilian mariners transiting the Strait of Hormuz". West Texas Intermediate crude also climbed, rising about 2.4%. Quantum Strategy's David Roche warned in a Monday note that global crude inventories could tighten by September, setting a Brent target of $95 to $105 a barrel.money.usnews+1

Chip Rout Deepens Into Bear Territory

The oil shock landed on markets already reeling from a sharp correction in semiconductor stocks. The Philadelphia Semiconductor Index PHLX Semiconductor Sector Index ↘ 2.10% entered a technical bear market last week, closing on July 17 more than 20% below its June 22 record high. The index lost roughly 10% in the week ending July 18, its steepest weekly decline since April 2025. Japan's Nikkei 225 plunged over 4,100 points at one point on Friday, falling as low as 62,704, before ending the session down about 6.18%. Memory chipmaker Kioxia and Tokyo Electron led the rout in Tokyo. South Korea's Kospi closed its last session before a Friday holiday down 6.37% at 6,820.60, dragged lower by Samsung Electronics and SK Hynix.home+5

Macro Crosscurrents Cloud Outlook

The dollar held firm near 162.50 yen as investors sought safe-haven positioning amid the dual shocks of rising energy costs and equity weakness. While a surprise cooldown in U.S. inflation — headline CPI fell 0.4% in June, its first decline since the pandemic — initially eased pressure on the Federal Reserve, traders were still pricing in about 27 basis points of rate increases by December as oil-driven inflation fears reasserted themselves. Traders now see roughly a 60% chance of a rate hike at the Fed's September meeting, down from over 90% before the CPI release, according to Reuters. With earnings from Alphabet ↗ 0.12%, Microsoft ↗ 0.56%, Amazon Amazon.com, Inc. ↗ 2.46%, and Meta ↗ 0.43% due in the coming days, the results could determine whether the semiconductor selloff deepens or stabilizes.longforecast+3