Oil prices surged nearly 3% on Monday after renewed hostilities in the Gulf raised concerns over the reopening and security of the Strait of Hormuz, one of the world’s most critical oil shipping routes.
At the same time, global equity markets remained resilient, with strong demand for AI-related stocks continuing to support investor sentiment despite rising geopolitical tensions in the Middle East.
Iran and the United States accused each other of launching fresh military strikes over the weekend, adding uncertainty to ongoing diplomatic efforts aimed at ending the three-month conflict. Reports indicated that U.S. forces targeted Iranian military sites, while Iran responded with retaliatory attacks. Kuwaiti defense systems were also reportedly activated to intercept incoming missiles and drones.
Although negotiations between Washington and Tehran are said to be continuing, investors remain cautious after U.S. Defense Secretary Pete Hegseth warned that further military action could resume if no agreement is reached.
Brent crude futures climbed around 3.3% to $94.12 per barrel, fueling concerns over inflation and increasing expectations that central banks may need to maintain higher interest rates for longer. Rising oil prices also triggered weakness in government bond markets.
Despite the geopolitical uncertainty, global stock markets held firm. S&P 500 and Nasdaq futures both gained 0.3% after major U.S. indexes reached record highs last week.
The MSCI All-World Index remained close to all-time highs, while Asian markets including Tokyo and Seoul continued trading near record levels, supported by strong momentum in artificial intelligence and semiconductor sectors.
The strength of the AI boom was further highlighted by South Korea’s export data, which showed shipments rising at the fastest annual pace in more than 40 years, reaching a record $87.75 billion in May.
Meanwhile, investors are also closely watching upcoming speeches from Federal Reserve officials and this week’s U.S. payroll data for further clues on the future direction of interest rates.
Attention is also on NVIDIA CEO Jensen Huang, who opened the Computex technology event in Taiwan on Monday with expected updates on the company’s latest AI developments and Taiwan’s growing importance in the global AI supply chain.
