NEW YORK (AP) — Oil prices jumped Monday following a weekend of attacks in the Middle East, while more losses for computer chip companies and other winners of the artificial-intelligence boom dragged stock markets lower.
The price for a barrel of Brent crude oil, the international standard, climbed 9.6% to $83.30 after the United States and Iran each said the Strait of Hormuz is under its control. Fighting in the region has kept oil tankers from using the strait to deliver crude to customers from the Persian Gulf, which drives up fuel prices worldwide.
The gains for oil prices accelerated immediately after President Donald Trump said he’s reinstating a blockade to prevent tankers carrying Iranian oil from using the strait. He also called for 20% payments on all cargo shipped through it to reimburse the United States for providing protection in the area.
Brent’s price, though, remains well below its wartime peak of nearly $120 per barrel for its most actively traded contract.
On Wall Street, the S&P 500 fell 0.8%, coming off its fourth winning week in the last five. The Dow Jones Industrial Average dropped 138 points, or 0.3%, and the Nasdaq composite sank 1.6%.
Chip stocks like Micron Technology helped lead the way lower. Micron fell 4.4%, eating into what had been a stellar rise of 243.1% for the year so far.
Real profits are behind the rise because the AI rush has created surging demand for computer memory and other computing building blocks. But worries are rising that stock prices have shot too high and that the demand may not be sustainable if AI doesn’t deliver as much profit and productivity as expected.
Nvidia fell 3.5%. Because it’s the largest stock on Wall Street by value thanks to the euphoria around AI, it was the single heaviest weight on the S&P 500.
The day’s losses began in Asia, where South Korea’s Kospi index dropped 8.9%. That included a 15.4% plunge for SK Hynix’s stock in Seoul, the worst since it began trading in 1997.
The South Korean tech giant just launched shares of its stock trading in the United States on Friday, raising roughly $26.5 billion. Those shares jumped 13.1% in their first day of trading, but they fell 9.3% Monday.
Other areas of the AI industry held up a bit better, and Taiwan Semiconductor Manufacturing Co.’s shares in Taiwan rose 1%. The chipmaker said its revenue in June soared nearly 68% from a year earlier, bringing its total revenue growth for the first half of the year to 35.6% from a year earlier.
But TSMC’s stock that trades in the United States fell 2.9% later in the day.
