Asian Markets and Oil Prices React to U.S.-Iran Tensions

Asian stock markets mostly showed gains on Monday, with the exception of South Korea’s Kospi, which dropped nearly 5%. Market participants were selling off stocks related to artificial intelligence. In contrast, Japan’s markets were not in session due to a public holiday. Meanwhile, futures for the U.S. market presented mixed results.

Oil prices experienced a significant rise, with Brent crude surpassing $90 a barrel. This increase came as tensions between the United States and Iran escalated toward the threat of full-scale conflict. Brent crude grew by 2.6% to reach $90.40 per barrel, while benchmark U.S. crude rose 2.2%, priced at $83.58 per barrel. The ongoing exchange of military strikes between the two countries was noted by ING commodities strategists Warren Patterson and Ewa Manthey, stating that the situation could lead to wider hostilities throughout the Persian Gulf.

Strait of Hormuz tanker traffic, vital for global oil transport, has nearly ceased, adding further pressure on oil supplies. The Kospi in Asia, previously buoyed by the global interest in AI, fell 4.9% to 6,490.97. Major stocks like Samsung Electronics and SK Hynix suffered declines of 4.4% and 3.3%, respectively.

Taiwan’s Taiex index, also dominated by AI-linked stocks, slightly decreased, though its leading firm, Taiwan Semiconductor Manufacturing Co. (TSMC), rose by 2%. Prior to this, TSMC shares had dropped 7.3% following their announcement of a $100 billion expansion plan in U.S. chip production.

Other market movements included Hong Kong’s Hang Seng index climbing 2.1% to 25,105.78 and the Shanghai Composite index advancing 1.2% to 3,808.39. Australia’s S&P/ASX 200 increased by 0.2% to 8,815.30, whereas India’s Sensex slipped by 0.9%.

The previous trading week wrapped up with AI-related shares negatively impacting world markets, amid concerns of an AI bubble fueled by substantial investment pledges in the sector. The introduction of a new AI model from Beijing-based Moonshot AI contributed to market anxiety, drawing comparisons to China’s major impact on markets back in early 2025.

In the United States, the S&P 500 index closed the week 1% lower at 7,457.69. The Dow Jones Industrial Average decreased by 0.8% to end at 52,146.42. The tech-focused Nasdaq composite experienced a 1.4% decline, finishing at 25,520.24. Among tech stocks, Nvidia saw a 2.2% drop, while Broadcom and AMD also fell by 1% each.

Shares of SpaceX fell 5.4%, dropping below its IPO price of $135 a share, marking its lowest level since it began public trading on the Nasdaq. Currency market movements showed the U.S. dollar slipping to 162.37 Japanese yen from a previous 162.43 yen. The euro strengthened slightly to $1.1446 from $1.1438.