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3mo ago

U.S.–Iran Escalation Boosts Oil While Chip Stocks Plummet

Rising oil from renewed hostilities is lifting inflation risk and could reduce room for central banks to ease policy.

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Overview

  • On Friday, a fresh round of hostilities between the United States and Iran pushed Brent toward about US$88 and WTI above US$80, driving a roughly 15–16% weekly gain in oil prices.
  • A sell-off that began in Asian markets worsened after Taiwan Semiconductor raised its investment outlook, leaving the Philadelphia Semiconductor index about 20% below its June peak.
  • Investors moved into safer assets so the dollar strengthened against emerging-market currencies and the Brazilian real closed near R$5.11.
  • Bitcoin and other cryptocurrencies fell, trading near US$63,000, while Brazilian stocks finished roughly flat because gains in Petrobras offset wider losses.
  • Near-term risks to watch are continued oil-price volatility from the Middle East and a reassessment of large AI and chip capital spending that could keep pressure on global equities and limit expectations for central-bank rate cuts.