Oil advanced for a third straight session on Wednesday and the dollar briefly touched 160 yen, as renewed hostilities in the Gulf overshadowed stalled US-Iran talks and added another layer of risk to already cautious global markets.
US crude futures rose about 2% to $95.40 a barrel, extending a rally fuelled by concerns over supply disruptions in the Strait of Hormuz.
The yen hovered near 159.86 per dollar after briefly weakening past the closely watched 160 level, while Bitcoin dropped to a two-month low of $66,123 as risk appetite faltered.
The moves came as investors balanced three competing forces: worsening geopolitical risks in the Middle East, resilient enthusiasm for artificial intelligence shares, and a rates outlook that remains heavily dependent on incoming US economic data.
Markets react to fresh Gulf hostilities
Oil prices were supported by reports that Iran fired missiles at Kuwait and Bahrain, attacks that were either thwarted or failed, while US forces struck Iran’s Qeshm Island in the Strait of Hormuz.
Iran’s Revolutionary Guards said they had attacked the US Fifth Fleet headquarters, escalating fears that the conflict could spill further into one of the world’s most important energy corridors.
The developments came a week after Iran and the United States outlined a tentative deal to halt the war.
That agreement has yet to be signed, leaving markets vulnerable to abrupt shifts in sentiment.
“Last week … trajectory was towards some sort of MOU and markets were high on the belief that that was coming,” said Chris Weston, head of research at Pepperstone in Melbourne.
“Things are looking more precarious now.”
The fresh escalation has put crude back at the centre of global market pricing, particularly as traders assess whether shipping flows through the Strait of Hormuz could face disruption.
AI-linked shares buck broader caution
While S&P 500 futures slipped, artificial intelligence momentum continued to support parts of the equity market, particularly in Asia.
Benchmarks in Taiwan and Japan touched record highs, helped by demand for companies linked to chipmaking, servers and AI infrastructure. South Korean markets were closed.
Marvell Technology surged 32.5% to a record after Nvidia Chief Executive Jensen Huang described the chipmaker as “the next trillion dollar company” at Computex in Taipei.
The rally showed that investor appetite for AI-linked names remains strong, even as geopolitical risks and higher-for-longer interest-rate concerns weigh on broader sentiment.
In private markets, SpaceX is planning to raise $75 billion in an initial public offering next week by selling 555.6 million shares at a target price of $135 each, according to a person familiar with the matter.
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