Gulf Conflict Fuels Oil Surge
Asian Shares Rally on Tech, Oil Prices Spike Amid Gulf Hostilities, Fueling Rate Hike Bets
Asian shares climbed on Thursday as a semiconductor rally lifted markets, but oil prices surged for a third straight session after U.S. military strikes on Iran reignited fears of a wider Gulf conflict. Brent crude futures rose 0.8% to $78.65 a barrel and crossed above $80 a barrel for the first time since June 22 — up 9% on the week, according to Reuters.
The oil spike hammered bonds and fueled bets that the Federal Reserve may need to raise interest rates to fight inflation. Wall Street futures were flat in Asia, while Europe's pan-region stock futures rallied 0.9%. Currency markets barely moved.
U.S. Strikes on Iran Reopen Gulf Tensions
The U.S. military launched fresh strikes on Iran aimed at keeping the Strait of Hormuz open, according to Yahoo Finance. The Strait is one of the world's most critical oil shipping lanes. Any closure there can choke global oil supply fast.
Oil prices rose for a third straight session on the back of the escalation. Brent crude crossed $80 a barrel — a level not seen since late June. Traders are now pricing in a sustained risk premium on every barrel shipped through the Gulf, Market Screener reported.
Chip Stocks Lead Asian Markets Higher Despite Oil Drag
Semiconductor shares got a break from recent heavy selling and drove Asian indexes upward on Thursday. The chip rally gave markets a lift even as oil price fears capped the overall gains, Market Screener noted.
Europe's pan-region stock futures rose 0.9%, showing broader optimism outside Asia. Wall Street futures were flat, suggesting U.S. investors are waiting to see how the Gulf situation develops before making big moves, according to Reuters.
Oil Spike Stokes Inflation Fears and Bond Selloff
Higher oil prices feed directly into everyday costs — from gas at the pump to shipping goods. That raises inflation. When inflation rises, central banks like the Federal Reserve often raise interest rates to cool things down. Higher rates make borrowing more expensive for everyone, 927 The Van reported.
Bonds sold off sharply as traders started pricing in possible Fed rate hikes later this year. Bond prices fall when investors expect higher interest rates ahead. The selloff shows just how quickly an oil shock can ripple through global financial markets, according to WSAU.
Currency Markets Stay Calm Amid the Chaos
Despite the oil surge and bond selloff, currency markets showed little reaction. The muted response suggests traders are uncertain about the next move and are holding back for now, according to Reuters.
Analysts say currency calm in the face of a Gulf crisis is unusual. It may mean investors believe the conflict will stay contained — or that they are simply waiting for more information before placing big bets, CA Market Screener noted.
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