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July 20, 2026 - 02:14
5 minutes
(Bloomberg) — Oil climbed to the highest level in more than a month while Asian equities fell after US and Iranian attacks escalated over the weekend, compounding a technology-led selloff that had already rattled markets.Brent rose as much as 3.8% to over $91 a barrel, the highest level since June, with back-and-forth strikes that have expanded beyond military targets. The dollar was stronger against most of its major peers. Treasury 10-year futures slipped seven basis points, with trading in the cash market closed Monday during Asian hours because of a holiday in Japan.Asian equities dropped, with South Korea’s Kospi Index falling more than 1%, while Nasdaq 100 futures rose 0.6% after Friday’s rout. Moonshot AI, whose latest model helped spark the global tech selloff by challenging perceptions of US leadership in artificial intelligence, told investors it plans to go public in as little as six months.The escalation in the Middle East is unnerving already jittery markets, after a selloff in tech stocks gathered pace on worries that the artificial-intelligence spending spree is becoming harder to justify. While AI demand and corporate earnings remain robust, growing questions over the durability of that growth have pushed a gauge of chip stocks into a bear market.“The dynamic is likely to be acutely felt in Asian markets today,” Kyle Rodda, a senior analyst at Capital.com, wrote in a note to clients. “Another potential jump in crude prices risks economic activity in the energy insecure region” while the drop in semiconductor stocks is “fueling a wholesale deleveraging across the world,” he wrote.The high-profile Philadelphia Stock Exchange Semiconductor Index fell into a bear market on Friday, jolted by Chinese AI startup Moonshot releasing a new AI model that upended industry perceptions of the US’s lead in the sector. The MSCI Asia Pacific Index is on the verge of a correction, dropping more than 9% from its record high in June.“Asia’s risk backdrop continues to deteriorate,” Wee Khoon Chong, a macro strategist at BNY in Hong Kong, wrote in a note to clients. “The correction in technology shares, firmer US dollar, higher oil prices and persistent geopolitical tensions all argue for a more defensive stance.”Elsewhere, gold extended last week’s slide, falling 0.5% to below $4,000 an ounce. Silver and platinum also declined as rising oil prices reinforced expectations that interest rates will stay higher for longer.Meanwhile, US forces struck Qeshm Island in the Persian Gulf and southern Iranian cities including Shadegan, Sirik and Hajiabad, Iranian media reported, with no immediate details on casualties or damage. Iran retaliated by targeting a power and water desalination plant in Kuwait, the third such attack in as many days.While haven demand supported the dollar in early trading, Treasuries may face pressure when cash trading begins in London as the more than 20% rally in oil prices this month revives worries about inflation.With Federal Reserve Chair Kevin Warsh making clear that the central bank’s priority is to pull down inflation, traders will also look to this week’s data for signs of a resilient US economy to cement expectations of a rate hike in September or October.The “US dollar can gain upside traction this week if the July PMI data reinforces the US economic outperformance story,” Elias Haddad, global head of markets strategy at Brown Brothers Harriman, wrote in a note to clients.Corporate Highlights:Taiwan Semiconductor Manufacturing Co. is adding $100 billion to its investments in Arizona to meet strong demand from US customers and to ward off ambitious rivals, a senior executive said this week. Some of the main moves in markets:StocksS&P 500 futures rose 0.2% as of 9:12 a.m. Tokyo time Hang Seng futures rose 0.5% Australia’s S&P/ASX 200 rose 0.3% Euro Stoxx 50 futures fell 0.7% CurrenciesThe Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1430 The Japanese yen was little changed at 162.50 per dollar The offshore yuan was unchanged at 6.7774 per dollar The Australian dollar was little changed at $0.6982 CryptocurrenciesBitcoin rose 0.6% to $64,879.43 Ether rose 1% to $1,884.72 BondsAustralia’s 10-year yield advanced six basis points to 4.96% CommoditiesWest Texas Intermediate crude rose 2.3% to $84.41 a barrel Spot gold fell 0.7% to $3,990.89 an ounce This story was produced with the assistance of Bloomberg Automation.©2026 Bloomberg L.P.
