Chip Stocks Boost Markets as Oil Prices Surge Amid Middle East Tensions

Asian markets kicked off the week with tech stocks leading the charge, driven by optimism over artificial intelligence spending. Meanwhile, oil futures experienced a notable upswing as peace negotiations between the U.S. and Iran faltered, raising concerns about energy supply disruptions from the Middle East.

Brent crude climbed above $107 a barrel, marking its highest level in nearly three weeks. The spike reflects apprehensions over the Strait of Hormuz corridor, which remains effectively closed to commercial oil and gas vessels amid the prolonged conflict triggered by U.S.-Israeli actions targeting Iran.

Natural gas prices for June delivery to northeast Asia surged sharply, trading around $16.70 per million British thermal units-over 60% higher than before the regional tensions flared. This escalation adds fuel to inflation worries and complicates central bank rate expectations for developed economies.

On Wall Street, chipmakers stole the spotlight after Intel forecasted better-than-expected second-quarter revenues. Shares of major semiconductor companies across Taiwan and South Korea surged, pushing market capitalizations past those of some European counterparts, underlining the continued investor enthusiasm for AI and related tech sectors.

The upcoming earnings season has many eyes on U.S. tech giants including Microsoft, Alphabet, Amazon, and Meta Platforms. Their reports will shed light on capital expenditure plans in AI and cloud infrastructure amid this fast-evolving technological shift.

Currency markets showed only mild volatility, with the euro hovering near $1.1725 and the yen around 159 to the dollar, as investors hold off major moves ahead of central bank meetings this week. The Bank of Japan is expected to maintain its current policy tone, while the Federal Reserve likely wraps up its tenure under Jerome Powell without rate changes.

Market watchers are eyeing the European Central Bank and Bank of England closely, as their statements could challenge prevailing expectations for further rate hikes during the year, potentially stirring some market recalibration.

Goldman Sachs economists recently revised their year-end Brent crude price forecast upward to $90 per barrel, citing anticipated normalized export flows from the Gulf by June's end. However, they cautioned that inventory drawdowns to critically low levels-a rarity in recent decades-could spark even sharper price moves.

President Donald Trump's recent cancellation of U.S. envoy visits to Pakistan weighed on diplomatic efforts, although reports suggesting Iran's willingness to reopen the Strait of Hormuz first and delay nuclear discussions provided some hope for easing tensions.

Whether chip stocks can sustain their momentum amid macroeconomic uncertainties and energy price shocks remains an intriguing question as this week unfolds.