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Oil prices jumped and stocks fell again Tuesday after fresh US strikes against Iran that marked a new escalation in hostilities that has fuelled fears over their already fragile truce and the chances of another spike in inflation.
Tech firms were once again in the crosshairs, with South Korea’s Kospi extending a painful selloff as chip titan SK hynix continued to be routed amid growing fears about the AI boom.
The latest attacks came after Iranian forces struck a commercial ship in the Strait of Hormuz — through which a fifth of global oil passes — early Sunday, before announcing the closure of the waterway.
That led to a series of US strikes on sites in the Islamic republic, which replied by hitting targets in Bahrain, Jordan, Kuwait and Oman.
Before the latest US attacks, President Donald Trump told conservative radio host Hugh Hewitt on Monday that “we’re going to hit them very hard tonight, and we’re going to hit them hard tomorrow”.
He later declared on Truth Social that the United States would be “known as ‘THE GUARDIAN OF THE HORMUZ STRAIT'” and levy a 20 percent fee on all cargo shipped through the waterway.
Oil extends gains after latest US strikes, tech suffers more losses
While Iran’s ports would again be blockaded, Trump said “all other countries will have fair and open use of the strait”.
However, he also said a deal with Tehran to end the crisis was still possible.
“Yeah, I think a deal is possible. Sure, I do,” he told reporters in the Oval Office. “We had a deal with them two days ago and then they said ‘Oh we can’t make that deal. We have to negotiate it further.'”
Oil prices shot up more than nine percent Monday over fears of renewed conflict and the possibility that a fresh surge in inflation could force the Federal Reserve and other central banks to hike interest rates soon.
And they continued to rise Tuesday, piling on more than one percent.
