Oil prices jump on Mideast war, stock markets diverge

Oil prices jump on Mideast war, stock markets diverge Brent crude rose above US$95 a barrel for the first time in nearly six weeks amid fears of supply disruptions from escalating US-Iran tensions. NEW YORK: World oil prices jumped Wednesday (Jul 22), with the benchmark international contract Brent North Sea crude surpassing US$95 for the first time in nearly six weeks as the United States and Iran carried out more strikes. Crude futures went on to give up some of the gains but still rose around three per cent. "The military actions have been renewed at an extraordinary high," said John Kilduff of Again Capital. "And the rhetoric is as hot as it's been since the beginning of the war." US President Donald Trump threatened to knock out one Iranian bridge or power plant in return for each attack on shipping in the Strait of Hormuz. Foreign Minister Abbas Araghchi said Iran would respond in kind to any attack on its infrastructure, saying on X, "our defence doctrine is clear: eye for an eye." Meanwhile, maritime data analysed by AFP showed that at least nine ships had turned back from crossing the Bab al-Mandab strait at the southern end of the Red Sea after Houthi rebels announced a blockade of Saudi ports. According to maritime data firm Kpler, three of the ships had taken on oil at Saudi Arabia's Red Sea Yanbu terminal, which is an important means for Riyadh to bypass the Hormuz Strait. Still, US equity markets had a muted response to the latest surge in oil prices, with the broadbased S&P 500 losing just 0.1 per cent. CFRA Research senior vice president Arun Sundaram cited a litany of worry items in a "growing list of headwinds" including renewed Trump tariff threats, spiking US bond yields and fears over China's artificial intelligence competitiveness. "The market has refused to flinch, like a boxer absorbing punch after punch while refusing to go down," Sundaram said. Crude futures went on to give up some of the gains but still rose around three per cent. "The military actions have been renewed at an extraordinary high," said John Kilduff of Again Capital. "And the rhetoric is as hot as it's been since the beginning of the war." US President Donald Trump threatened to knock out one Iranian bridge or power plant in return for each attack on shipping in the Strait of Hormuz. Foreign Minister Abbas Araghchi said Iran would respond in kind to any attack on its infrastructure, saying on X, "our defence doctrine is clear: eye for an eye." Meanwhile, maritime data analysed by AFP showed that at least nine ships had turned back from crossing the Bab al-Mandab strait at the southern end of the Red Sea after Houthi rebels announced a blockade of Saudi ports. According to maritime data firm Kpler, three of the ships had taken on oil at Saudi Arabia's Red Sea Yanbu terminal, which is an important means for Riyadh to bypass the Hormuz Strait. Still, US equity markets had a muted response to the latest surge in oil prices, with the broadbased S&P 500 losing just 0.1 per cent. CFRA Research senior vice president Arun Sundaram cited a litany of worry items in a "growing list of headwinds" including renewed Trump tariff threats, spiking US bond yields and fears over China's artificial intelligence competitiveness. "The market has refused to flinch, like a boxer absorbing punch after punch while refusing to go down," Sundaram said. TECH STOCK FOCUS While stock market traders kept a close watch on the Mideast war developments, focus was also firmly on the technology sector, as it has been for several weeks. "A rotation away from tech has resulted in a better day for European markets overall, which continue to defy the strength in oil," said Chris Beauchamp, chief market analyst at online trading and investing platform IG. Tech stocks had rebounded on Wall Street on Tuesday, but had a more difficult day on Wednesday, with the tech-heavy Nasdaq Composite finishing down 0.6 per cent. Companies that are massively deploying AI, such as Amazon, Meta and Microsoft, were trading sharply lower. The recent "pullback in chip stocks following a storming run earlier this year has left investors hungry for an update on AI-related demand and to see if all the big investments into tech infrastructure are paying off," said Russ Mould, investment director at AJ Bell. Google parent "Alphabet reports tonight, with Intel following tomorrow and Microsoft, Meta ... and others next week", he added. Asia's main stock markets closed mixed on Wednesday, as investors eagerly awaited earnings updates from technology giants. "A rotation away from tech has resulted in a better day for European markets overall, which continue to defy the strength in oil," said Chris Beauchamp, chief market analyst at online trading and investing platform IG. Tech stocks had rebounded on Wall Street on Tuesday, but had a more difficult day on Wednesday, with the tech-heavy Nasdaq Composite finishing down 0.6 per cent. Companies that are massively deploying AI, such as Amazon, Meta and Microsoft, were trading sharply lower. The recent "pullback in chip stocks following a storming run earlier this year has left investors hungry for an update on AI-related demand and to see if all the big investments into tech infrastructure are paying off," said Russ Mould, investment director at AJ Bell. Google parent "Alphabet reports tonight, with Intel following tomorrow and Microsoft, Meta ... and others next week", he added. Asia's main stock markets closed mixed on Wednesday, as investors eagerly awaited earnings updates from technology giants. Source: AFP/fs [Image text:] SPECIAL SHEPSES