Asian stocks slide as oil surge hits chips and bonds

Asian markets opened lower as renewed fighting in the Gulf and Iran’s announcement that it had closed the Strait of Hormuz pushed Brent crude above $79 a barrel. Brent rose 4.1% to $79.11 and U.S. crude climbed to $74.37, prompting investors to price the risk of disruption to shipping and supply.

U.S. officials reported about 20 vessels were escorted through the waterway over the previous 24 hours, while ship-tracking data showed very limited traffic. The supply uncertainty strengthened the dollar and pushed short-term U.S. Treasury yields higher.

South Korea’s KOSPI led regional losses, falling 5.4% after near 8% losses last week. The index’s heavy exposure to semiconductor companies amplified the decline as leveraged positions in chip stocks were reduced. Samsung Electronics and SK Hynix account for large portions of the Korean market and are closely watched for signs of demand for AI-related chips.

SK Hynix’s U.S.-listed shares jumped almost 14% in their Nasdaq debut following a $26.5 billion ADR sale, but trading in Seoul remained weak as some investors questioned whether recent gains in AI-related names had outpaced company earnings and cash generation.

Futures for the S&P 500 fell about 0.4% and Nasdaq futures dropped roughly 0.9%. European futures also moved lower. The dollar index held near 101.13 and two-year U.S. Treasury yields rose to their highest level since early 2025. Gold weakened as markets weighed inflation risks against safe-haven demand.

Market participants pointed to two upcoming U.S. events that could influence policy and market direction: June inflation data due Tuesday and Fed Chair Kevin Warsh’s first congressional testimony in his new role. Higher oil prices have added attention to whether inflation data may keep central bank policy on a tighter path.

Currency moves reflected energy and policy concerns. The euro slipped amid Europe’s reliance on imported energy. The dollar climbed to about 162.03 yen after Japan’s finance minister suggested ways to encourage pension funds, including the Government Pension Investment Fund, to increase holdings of domestic assets. Economists at National Australia Bank said any gradual shift in GPIF allocations could support the yen over time.

Analysts noted effects of rising AI investment. Bank of America strategists warned that heavy capital expenditure on AI by large cloud providers is reducing free cash flow even as chip suppliers benefit from increased demand. Citi analysts continue to favor global technology and U.S. equities but expect volatility in AI-related stocks to remain elevated.

Traders are pricing the possibility of disruption in the Strait of Hormuz rather than a confirmed full shutdown, leaving markets sensitive to further developments in the Gulf. Continued uncertainty about shipping, higher energy costs and stretched valuations in technology and semiconductor sectors contributed to the broad decline across asset classes.