Markets Face Fresh Volatility as Oil Rises, Chip Stocks Retreat and Earnings Season Begins: Dow Jones, S&P, Nasdaq, Wall Street Futures

Financial markets started the week on an uncertain note as renewed military tensions between the United States and Iran pushed oil prices sharply higher, pressured equity futures and shifted investor attention toward a crucial week of corporate earnings.

At the same time, weakness across Asian semiconductor stocks has prompted questions about near-term sentiment toward artificial intelligence investments, despite continued strong demand for advanced chips.

Geopolitical Tensions Pressure Equity Futures

U.S. stock futures traded mixed on Monday following another round of military action involving Washington and Tehran, raising concerns over the potential impact on global markets.

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

Technology stocks were expected to lead declines after heavy selling in Asian semiconductor shares, while investors also positioned for a busy schedule of second-quarter earnings reports.

This week, markets are expected to be driven primarily by geopolitical developments and corporate results. Higher energy prices could revive inflation concerns, while earnings will be closely watched for signs that spending on artificial intelligence continues to support profit growth.

Strait of Hormuz Remains in Focus

Investors continued to monitor developments in the Middle East after the United States and Iran exchanged further strikes over the weekend.

U.S. Central Command said it had carried out a fresh series of attacks on multiple Iranian targets intended to reduce Tehran’s ability to threaten shipping through the Strait of Hormuz.

President Donald Trump insisted that the strategic waterway remained open to commercial traffic, dismissing Iranian claims that it had been closed following recent U.S. military action.

The conflicting statements have increased uncertainty surrounding global energy supplies, given that around one-fifth of the world’s seaborne oil normally passes through the Strait of Hormuz.

A prolonged disruption could drive oil prices even higher, adding further inflationary pressure for households and businesses worldwide.

Crude Prices Extend Their Rally

Oil prices climbed sharply as traders reacted to the renewed conflict.

Brent crude rose 4.8% to $79.65 per barrel, while U.S. West Texas Intermediate gained 5% to $74.98 per barrel after both benchmarks had already posted gains exceeding 4% last week.

The rally followed Iran’s announcement that it had closed the Strait of Hormuz, although U.S. officials disputed the claim and said commercial shipping continued uninterrupted.

Sustained increases in oil prices typically feed through to higher fuel and transport costs, potentially increasing inflation while benefiting energy producers. Conversely, sectors such as airlines, transportation and consumer discretionary companies could face additional headwinds.

Semiconductor Shares Under Pressure

Asian chipmakers came under significant selling pressure, led by SK Hynix, whose shares fell almost 14% in South Korea despite the company’s successful Nasdaq listing last week.

The decline contributed to a drop of more than 5% in South Korea’s KOSPI index, prompting the Korea Exchange to temporarily suspend trading.

Much of the selling appeared to reflect profit-taking and investor caution ahead of earnings season rather than weakening demand for artificial intelligence hardware.

By contrast, Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) reported another strong quarter, with second-quarter revenue increasing 36% year-on-year to T$1.27 trillion, supported by sustained demand for AI chips.

The contrasting performances underline the difference between short-term market sentiment and longer-term industry fundamentals.

Earnings Season Takes Centre Stage

Alongside geopolitical developments, investors are preparing for a packed week of second-quarter earnings announcements.

After months of equity gains fuelled largely by optimism surrounding artificial intelligence, markets will now look for evidence that corporate earnings continue to justify current valuations.

Technology companies are likely to remain under particular scrutiny as investors assess whether continued investment in AI infrastructure is translating into stronger revenues and profits.

The results will also influence expectations for the wider economy, particularly regarding inflation and the future direction of U.S. interest rates.

Taiwan Semiconductor stock price