Middle East Conflict Rattles Markets as Oil Prices Spike

The sudden flare-up in the Gulf has forced a rapid reassessment of investor sentiment. With Washington striking Iranian air defense and surveillance assets, and Tehran hitting facilities in Bahrain and Kuwait, the prospect of supply chain disruptions has revived inflation fears. This energy-driven volatility is compounded by a cooling of the artificial intelligence rally, as investors move to lock in gains from months of record-breaking growth in the tech sector.

Semiconductor stocks are bearing the brunt of the correction. Samsung Electronics slipped for the second consecutive session despite reporting a sharp uptick in quarterly profits, signaling that even strong earnings may no longer be enough to sustain high valuations. As Asian markets retreat, U.S. Treasury yields have climbed to one-month highs, reflecting a growing consensus that central banks may be forced to maintain restrictive monetary policies if fuel costs remain elevated. All eyes are now on the upcoming Federal Reserve meeting minutes, which investors hope will provide a clearer roadmap for interest rates amid this new period of geopolitical instability.