Tech Sell-Off Deepens as Oil Prices Rise on Renewed Iran Tensions
Poinews.com – Global stock markets experienced a downturn on Wednesday, with Asian indices falling amid a broader retreat in technology shares on Wall Street. The turmoil coincided with a surge in oil prices, driven by heightened concerns over the Strait of Hormuz following fresh US military action against Iran.
US Strikes and Iran’s Response
The US military launched attacks early Wednesday after an Army helicopter crashed near the Strait of Hormuz, an event President Donald Trump attributed to Iran. In response, Tehran declared it would “leave no attack or threat unanswered,” signaling a potential escalation in the ongoing conflict.
“The situation remains highly volatile,” ING commodities strategists Warren Patterson and Ewa Manthey wrote in a note. “This once again demonstrates the difficulty Iran and the US face in working towards a sustainable ceasefire that allows for the free flow of vessels through the Strait of Hormuz.”
Oil Price Volatility and Market Anxiety
Oil prices climbed amid uncertainty over the Strait of Hormuz’s full reopening. Brent crude, the global benchmark, rose 0.9% to $92.30 a barrel after a prior decline. US benchmark crude gained 1% to $89.04, reflecting concerns about prolonged regional instability.
Stock Market Reactions
Technology stocks dominated the decline, as investors fretted over potential rate hikes that could dampen growth-oriented companies. Market participants are closely tracking upcoming US inflation data, which economists anticipate will show the fastest annual price increase in over three years. Last week’s robust jobs report intensified speculation about Federal Reserve tightening.
In Asia, South Korea’s Kospi tumbled 4.7% to 7,720.59 after a previous rally. Samsung Electronics, a key player in memory and logic chips, dropped 5.8%. Shares of SK Hynix fell 6.3%, while Japan’s Nikkei 225 declined 1.4% to 64,524.84. Producer prices in May rose 6.3%, the swiftest increase in over three years, prompting further selling.
SoftBank Group, heavily invested in AI ventures, saw an 8.9% drop. Meanwhile, Tokyo Electron gained 5.3%. Hong Kong’s Hang Seng Index fell 1.1% to 24,296.62, and China’s Shanghai Composite slipped 0.7% to 3,980.24. Chinese producer prices increased 3.9% in May, the fastest growth in nearly four years.
Regional Market Fluctuations
Australia’s S&P/ASX 200 edged up 0.2% to 8,624.50. Taiwan’s Taiex declined 1.6%, while India’s Sensex rose 0.6%. On Wall Street, the S&P 500 dropped 0.3% to 7,386.65, the Nasdaq composite fell 1%, and the Dow Jones Industrial Average rose 0.2% to 50,872.11.
US chipmaker Micron Technology saw a dramatic shift, starting with a 4% gain but ending the day down 1.4%. Marvell Technology and AMD also posted significant losses, falling 7.6% and 3%, respectively.
Currency and Bond Markets
In currency trading, the US dollar remained stable at 160.36 yen. The euro rose to $1.1550 from $1.1543. Gold prices dipped 2% to $4,197.60 an ounce in early European trade. Bond markets showed mixed results, with European 10-year yields falling slightly, while the US 10-year Treasury yield rose 2.3 basis points to 4.545%.
