Oil Surges as Iran Fighting Resumes, While AI Selloff Sends Wall Street Lower

ERBIL (Kurdistan24) — Global oil prices surged, and US stock markets fell sharply on Wednesday as renewed fighting involving Iran heightened concerns over energy supplies, while a broad selloff in artificial intelligence-related technology stocks weighed heavily on Wall Street ahead of a closely watched Federal Reserve interest-rate decision.

Brent crude, the international benchmark, climbed 6.7% to $87.55 per barrel, reflecting growing fears that escalating conflict in the Middle East could disrupt global oil flows through one of the world's most critical energy-producing regions.

The rally came after Iran launched a barrage of missiles targeting US forces in the Middle East, while US forces, in coordination with Saudi Arabia, carried out strikes against Tehran-backed militias in Iraq.

The renewed violence revived concerns over the stability of oil exports from the Gulf, after weeks of volatility driven by uncertainty over whether Washington and Tehran could reach an agreement allowing oil tankers to move freely through regional waterways.

Brent crude has experienced sharp price swings this month, falling as low as $72 per barrel before climbing above $102 last week amid fluctuating expectations surrounding regional security and energy shipments.

Meanwhile, Wall Street retreated as investors weighed the implications of higher oil prices and awaited the outcome of the Federal Reserve's two-day policy meeting.

The S&P 500 fell 1%, while the Dow Jones Industrial Average dropped 878 points, or 1.7%. The Nasdaq Composite declined 1.2%, with technology stocks leading the losses.

Higher energy prices have renewed concerns that inflation could accelerate again after showing signs of easing in recent months. Those worries have complicated expectations for US monetary policy, with traders pricing in roughly a 34% probability that the Federal Reserve will raise its benchmark interest rate—its first increase in three years—according to CME Group data.

Rising interest rates tend to weigh particularly heavily on high-growth technology companies, whose valuations are more sensitive to borrowing costs.

Artificial intelligence-related stocks remained under pressure despite reporting strong financial results, as investors questioned whether rapid revenue growth can be sustained over the long term.

Chipmaker Nvidia fell 2.8%, while Advanced Micro Devices (AMD) dropped 6.1% and Micron Technology lost 6.3%.

KLA Corp., a supplier of semiconductor manufacturing equipment, slid 10% despite posting quarterly earnings and revenue that exceeded analysts' forecasts, reflecting elevated investor expectations following a strong rally earlier this year.

The pressure extended beyond the United States. South Korea's Kospi index fell 6% after plunging 10.8% the previous day, driven largely by declines in technology giants Samsung Electronics and SK Hynix.

SK Hynix shares dropped 9.6% even after the company reported record quarterly revenue and profit fueled by strong AI-related demand. Its revenue rose 257% from a year earlier but still failed to meet analysts' expectations.

Apple bucked the broader technology selloff, edging up 0.1%. Some analysts have described the company as an "anti-AI" play among major technology firms because of its comparatively restrained spending on artificial intelligence.

Markets elsewhere delivered mixed performances, with Hong Kong's Hang Seng Index rising 2%, while Japan's Nikkei 225 fell 1.5%.

In bond markets, US Treasury yields also moved higher alongside oil prices. The yield on the benchmark 10-year Treasury note rose to 4.65% from 4.61% a day earlier, adding further pressure on borrowing costs after long-term US mortgage rates climbed to their highest level in nearly a year.