Oil Rally, chip selloff, earnings loom – What’s moving markets

Renewed fighting between the United States and Iran rattled markets at the start of the week, sending oil prices sharply higher and weighing on stock futures.

Investors are also preparing for a busy week of corporate earnings, while a selloff in Asian chip stocks is raising fresh questions about whether the artificial intelligence rally is beginning to lose momentum despite strong demand for advanced semiconductors.

1. Futures fall as Middle East tensions escalate

U.S. stock futures were mixed on Monday as investors reacted to renewed military strikes between the United States and Iran, increasing concerns that the conflict could further disrupt global markets.

By 04:53 ET (08:53 GMT), S&P 500 futures had fallen 0.3%, while Nasdaq 100 futures slid 1%. Dow Jones futures were up 0.03%.

Technology shares looked set to lead the declines after heavy losses in Asian semiconductor stocks, while investors also prepared for a busy week of second-quarter earnings that could provide fresh insight into corporate spending and the outlook for artificial intelligence.

For investors, geopolitics and earnings are likely to be the two biggest drivers of markets this week. Higher oil prices could reignite inflation concerns, while earnings from major companies will help determine whether the recent AI-led rally still has room to run.

2. U.S. and Iran clash over Strait of Hormuz

Markets remained on edge after the U.S. and Iran exchanged fresh strikes over the weekend, with both sides offering conflicting accounts of the status of the Strait of Hormuz, one of the world’s most important oil shipping routes.

U.S. Central Command said it had concluded a new round of strikes against dozens of targets across Iran aimed at reducing Tehran’s ability to threaten shipping through the waterway.

President Donald Trump insisted the Strait remained open to commercial traffic, rejecting Iranian claims that it had been closed in response to recent U.S. attacks.

The conflicting statements have left investors uncertain about the outlook for global energy supplies, especially as roughly one-fifth of the world’s seaborne oil typically passes through the Strait of Hormuz.

For markets, the waterway has become the biggest geopolitical risk to watch. Any prolonged disruption could push oil prices even higher, increase inflation and add pressure to consumers and businesses around the world.

3. Oil jumps nearly 5%

Oil prices surged in European trade after renewed fighting between Washington and Tehran revived fears of supply disruptions from the Middle East.

Brent crude climbed 4.8% to $79.65 a barrel, while U.S. West Texas Intermediate crude rose 5% to $74.98. Both benchmarks had already gained more than 4% last week as tensions escalated.

The rally followed Iran’s announcement that it was closing the Strait of Hormuz, although U.S. officials disputed the claim and said commercial shipping was continuing.

Energy markets have become increasingly volatile as traders try to assess whether the conflict will materially disrupt oil exports from the region.

Higher oil prices often translate into higher gasoline prices and increased transportation costs, which can eventually feed into broader inflation. While energy companies may benefit, sectors such as airlines, transport and consumer discretionary stocks could face additional pressure if crude prices continue climbing.

4. Chip stocks tumble despite strong AI demand

Shares of SK Hynix plunged nearly 14% in South Korea, leading a broad selloff across Asian semiconductor companies despite the memory-chip maker’s successful Nasdaq debut last week.

The decline dragged South Korea’s benchmark KOSPI index down more than 5%, prompting the Korea Exchange to briefly halt trading.

The selloff appeared to reflect a combination of profit-taking and investor caution ahead of a busy earnings season, rather than weakening demand for AI chips.

In contrast, Taiwan Semiconductor Manufacturing Co. reported another strong quarter, with second-quarter revenue rising 36% from a year earlier to T$1.27 trillion as demand for AI-related chips remained robust.

For investors, the contrasting moves highlight an important trend.

Short-term market sentiment can push semiconductor stocks sharply lower, even as the underlying demand for AI infrastructure remains strong. Earnings over the coming weeks will be crucial in determining whether fundamentals continue to justify the sector’s high valuations.

5. Earnings season takes center stage

Beyond geopolitics, investors are shifting their attention to a packed week of second-quarter earnings that could help determine the market’s next direction.

After months of strong gains driven largely by enthusiasm around artificial intelligence, companies will now need to show that earnings growth is keeping pace with lofty expectations.

Technology companies remain under particular scrutiny following last week’s selloff, with investors looking for evidence that spending on AI infrastructure continues to translate into stronger revenues and profits.

The results are also likely to shape expectations for the broader economy, particularly as markets continue to debate the outlook for inflation and U.S. interest rates.

Earnings season often matters more than headlines. Strong results can quickly restore confidence after market pullbacks, while disappointing guidance can trigger sharp moves in individual stocks and broader indexes.