Oil prices extended gains on Tuesday as renewed military action in the Middle East heightened concerns over global energy supplies, while Asian stock markets declined amid fresh selling in artificial intelligence-related shares.
Brent crude traded above $84 a barrel in early trading after surging nearly 10 percent in the previous session. US benchmark West Texas Intermediate crude also advanced 1.4 percent to about $79.20 a barrel. Although prices remain well below the highs of almost $120 a barrel seen during earlier periods of conflict, traders are increasingly focused on the risk of supply disruptions.
Market sentiment weakened after the United States launched additional strikes on Iran. President Donald Trump said Washington was reinstating a blockade on Iran in the Strait of Hormuz, while both countries asserted control over the strategic waterway.
The Strait of Hormuz remains one of the world’s most important oil shipping routes, carrying a significant share of global crude exports. Ongoing fighting has disrupted tanker movements through the passage, raising fears that prolonged instability could tighten supplies and keep energy prices elevated.
Stock markets across Asia reflected those concerns. Japan’s Nikkei 225 index fell 1 percent to 66,574.96, while South Korea’s Kospi dropped 3.2 percent to 6,589.37. China’s Shanghai Composite Index slipped 0.8 percent despite official data showing exports climbed 27 percent in June from a year earlier, supported by strong global demand for semiconductors and other technology products linked to the rapid expansion of artificial intelligence.
Hong Kong’s Hang Seng Index edged 0.1 percent higher, offering one of the few bright spots in the region, while Australia’s S&P/ASX 200 declined 0.5 percent.
Wall Street also ended Monday in negative territory. The S&P 500 lost 0.8 percent after recording four winning weeks out of the previous five. The Dow Jones Industrial Average slipped 0.3 percent, while the Nasdaq Composite dropped 1.6 percent as investors reduced exposure to major AI-related companies.
Micron Technology fell 4.4 percent after an exceptional rally this year, while Nvidia lost 3.5 percent. Investors have become increasingly cautious that valuations across the AI sector may have risen faster than earnings prospects can justify.
Attention is now shifting to the US corporate earnings season. Several of the country’s largest financial institutions, including Bank of America, Citigroup, JPMorgan Chase, Goldman Sachs and Wells Fargo, are scheduled to report quarterly results on Tuesday. Analysts expect companies in the S&P 500 to post overall earnings growth of 23.6 percent compared with a year ago.
Investors will also be watching inflation risks closely. Rising oil prices could increase costs across the global economy, potentially prompting central banks, including the US Federal Reserve, to maintain higher interest rates for longer, adding another layer of uncertainty for financial markets.
