Chip Stocks Rally on AI Optimism as Oil Price Surge Adds Market Tension

Oil prices climbed sharply on Monday as stalled U.S.-Iran negotiations continued to disrupt Middle East energy exports, fueling concerns across global markets. Brent crude futures rose nearly 2%, reaching a three-week high of $107.97 per barrel during Asian trading. This spike has intensified inflation fears and led investors to scale back expectations for interest rate cuts in major economies this year.

The ongoing geopolitical tension, particularly around the Strait of Hormuz, remains a key driver of volatility. With limited oil and gas shipments passing through the critical route, supply constraints are pushing energy prices higher. Liquefied natural gas (LNG) prices have also surged, with June delivery into Northeast Asia averaging $16.70 per million British thermal units—up roughly 61% from pre-conflict levels. Analysts at Goldman Sachs have raised their year-end Brent crude forecast to $90 per barrel, warning that further supply shortages could trigger even steeper price increases.

Despite energy market concerns, global stock markets showed resilience, supported by renewed enthusiasm around artificial intelligence (AI) investments. S&P 500 futures edged up by 0.2%, while markets in Taiwan, Japan, and South Korea followed Wall Street’s lead in reaching record highs. Strong demand for semiconductor stocks, fueled by optimistic AI spending outlooks, has boosted valuations across major tech-driven markets.

Currency markets remained relatively stable, with the euro trading at $1.1724 and the Japanese yen at 159.32 per dollar. Meanwhile, bond markets held steady as investors await key central bank decisions from the U.S. Federal Reserve, European Central Bank, Bank of England, and Bank of Japan. Most policymakers are expected to maintain current interest rates, though future guidance could shift expectations for potential rate hikes.

Investor attention is also focused on upcoming earnings reports from major technology companies, including Microsoft, Amazon, Alphabet, Meta, and Apple. These results, particularly capital expenditure on AI infrastructure, are expected to shape market sentiment in the coming weeks as the global economy balances geopolitical risks with rapid technological growth.