Tech sell-off deepens as oil prices rise on renewed Iran tensions

Global stock markets fell on Wednesday, extending a volatile week driven by concerns about rising inflation, potential U.S. interest rate hikes, and escalating tensions in the Middle East. Asian shares mostly retreated on Wednesday after a sell-off in technology stocks on Wall Street, while oil prices climbed following fresh US airstrikes against Iran. The US military launched attacks early on Wednesday after an Army helicopter crashed near the Strait of Hormuz, an incident President Donald Trump blamed on Iran. Tehran vowed to respond, saying it "will leave no attack or threat unanswered". The latest escalation has raised doubts about prospects for a lasting end to a conflict that has now lasted more than three months, unsettling markets already rattled by volatility in artificial intelligence-linked stocks. Uncertainty over the full reopening of the Strait of Hormuz also pushed oil prices higher. Brent crude, the international benchmark, rose 0.9% to $92.30 a barrel after falling the previous day. Before the conflict began in late February, Brent traded at around $70 a barrel. US benchmark crude gained 1% to $89.04 a barrel. "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." They added that seasonal demand remains strong, contributing to upward pressure on prices. Wall Street sell-off spreads to global markets In the stock markets, technology stocks led the decline as investors worried that possible higher interest rates could hurt growth companies, which often rely on borrowing and future earnings expectations. Traders are closely watching US inflation data due later this week, with economists expecting consumer prices to rise at their fastest annual pace in more than three years. Strong US jobs data released last week increased speculation that the Federal Reserve might raise interest rates to combat inflation. Markets have also become nervous after a strong AI-driven rally since March, with some investors questioning whether tech valuations have become too high. US futures edged lower after losses among chipmakers on Wall Street, including Micron Technology, Advanced Micro Devices (AMD) and Marvell Technology. In Asia, South Korea's Kospi fell 4.7% to 7,720.59 after a sharp rally a day earlier. Samsung Electronics, which makes memory and logic chips and is the country's most valuable company, dropped 5.8%. Shares of chipmaker SK Hynix lost 6.3%. Japan's Nikkei 225 declined 1.4% to 64,524.84 after data showed producer prices rose 6.3% in May from a year earlier, marking the fastest increase in more than three years. Shares of multinational investment holding firm SoftBank Group, which has significant exposure to AI-related investments, fell 8.9%. But chipmaker Tokyo Electron advanced 5.3%. Hong Kong's Hang Seng Index lost 1.1% to 24,296.62, while mainland China's Shanghai Composite slipped 0.7% to 3,980.24. Official data showed Chinese producer prices rose 3.9% in May, their fastest pace in nearly four years. Australia's S&P/ASX 200 edged up 0.2% to 8,624.50. Taiwan's Taiex fell 1.6%, while India's Sensex gained 0.6%. On Wall Street, the S&P 500 fell 0.3% to 7,386.65 on Tuesday. The Dow Jones Industrial Average rose 0.2% to 50,872.11, while the technology-heavy Nasdaq composite dropped 1%. US chipmaker Micron Technology went from an early 4% gain to a 10% drop before closing 1.4% lower. Marvell Technology fell 7.6%, and AMD lost 3%. Investors are also watching key US inflation data due later this week, as higher energy prices linked to the Iran war raise concerns about inflationary pressures. In currency markets, the US dollar was little changed at 160.36 yen, while the euro edged up to $1.1550 from $1.1543. Gold fell 2% to $4,197.60 an ounce in early European trading. In bond markets, yields on major European 10-year government bonds edged lower on Wednesday, while the benchmark US 10-year Treasury yield rose 2.3 basis points to 4.545%.