This content was published on
July 14, 2026 - 02:09
4 minutes
(Bloomberg) — Oil extended gains and Asian stocks dropped after the standoff between the US and Iran intensified, raising concerns that disruptions to energy supplies could accelerate inflation.Brent climbed 1.6% to about $84.65 a barrel. The commodity soared 9.6% on Monday — its biggest gain since May 2020 — after President Donald Trump reinstated the US blockade of Iranian ships transiting the Strait of Hormuz and demanded a 20% reimbursement on all other cargo shipped through the waterway.MSCI’s gauge for Asia Pacific shares fell 0.6%, with South Korea’s Kospi Index leading declines with a 2.7% drop. The chip sector remained in focus after SK Hynix Inc.’s American depositary shares fell 9.3% as an AI-fueled stock rout in South Korea spilled over into the US market. US equity-index futures also retreated.On Monday, Treasuries fell across the curve as traders increased bets on an interest-rate hike and oil jumped. Money markets priced in about 50% odds of a Federal Reserve hike in July as Governor Christopher Waller said officials may need to raise rates to tame price pressures. Gold and silver retreated, and a Bloomberg gauge of the dollar climbed the most since June 23.The latest wave of attacks between the US and Iran dashed hopes for a near-term normalization of traffic through the Strait of Hormuz. The escalation adds another layer of uncertainty ahead of a pivotal week for markets, with earnings season kicking off alongside US inflation data and Federal Reserve Chair Kevin Warsh’s congressional testimony, both seen as key to the outlook for interest rates.“The energy sector is once again in the limelight as the status of the Strait of Hormuz is driving price action in global markets,” said Ian Lyngen at BMO Capital Markets. “There is a growing sense that the situation is likely to get worse before it de-escalates.”The flare-up comes as investors are increasingly questioning whether the enormous sums being poured into artificial intelligence will generate commensurate returns.An AI-fueled stock rout in South Korea on Monday spilled over into the US market, underscoring concerns that the boom has become overextended. The selloff on the Kospi index is the latest sign of how volatile the Korean market has become after the AI rally drove massive outperformance versus global peers.“Uncertainty around the Middle East continues, but we think the AI wave is what will drive markets over the next few weeks, especially as earnings season kicks off,” said Sonu Varghese at Carson Group.Investors are now turning their focus to US inflation data after Waller said policymakers may need to raise rates in the near term if underlying inflation continues to signal broad price pressures.In the data due Tuesday, the Consumer Price Index is expected to slow to 3.8% in the year through June, from 4.2% in May, according to a Bloomberg survey of economists.Warsh will also make his first appearance before Congress as Fed chair.“If we get another hot reading on core inflation this week, then the FOMC will need to consider tightening monetary policy in the near term,” Waller said Monday, referring to the central bank’s rate-setting committee.Some of the main moves in markets:StocksS&P 500 futures fell 0.3% as of 9:06 a.m. Tokyo time Hang Seng futures fell 0.2% Japan’s Topix fell 0.4% Australia’s S&P/ASX 200 fell 0.3% Euro Stoxx 50 futures were little changed CurrenciesThe Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1383 The Japanese yen was little changed at 162.42 per dollar The offshore yuan was little changed at 6.7846 per dollar CryptocurrenciesBitcoin rose 0.1% to $62,240.49 Ether rose 0.4% to $1,773.45 BondsThe yield on 10-year Treasuries was little changed at 4.62% Japan’s 10-year yield was unchanged at 2.790% Australia’s 10-year yield advanced five basis points to 4.91% CommoditiesWest Texas Intermediate crude rose 1.7% to $79.45 a barrel Spot gold fell 0.2% to $3,993.11 an ounce This story was produced with the assistance of Bloomberg Automation.–With assistance from Rob Verdonck.©2026 Bloomberg L.P.
