Most Asian stock markets moved higher on Thursday, but an intensifying war with Iran sent Brent crude oil prices surging past $96 a barrel, raising fresh concerns about inflation and global economic stability.
South Korea’s Kospi index jumped 3.7% to 7,028.66, fueled by renewed investor enthusiasm for artificial intelligence stocks even after Wall Street posted a weak session. Samsung Electronics climbed 3%, while memory chipmaker SK Hynix added 3.4%.
Japan’s Nikkei 225 edged up 0.5% to 66,461.62, with technology firms leading the way. SoftBank Group shares advanced 3.3%. The U.S. dollar traded at 163.05 yen, with the Japanese currency hovering near a 40-year low. Analysts point to expectations that the gap between American and Japanese interest rates will grow wider due to higher U.S. inflation, which has been pushing the dollar up against the yen.
Across the rest of Asia, Hong Kong’s Hang Seng gained 1.3% to reach 25,227.06, while China’s Shanghai Composite index dipped 0.2% to 3,859.69. Australia’s S&P/ASX 200 rose 0.7% to 8,883.00. Taiwan’s Taiex fell 1%, and India’s Sensex declined 0.3%.
U.S. stock futures were lower heading into Thursday’s session, following a sluggish Wednesday on Wall Street where oil prices jumped 3%. The S&P 500 slipped 0.1% to 7,498.96, and the Dow Jones Industrial Average barely moved, falling less than 0.1% to 52,218.58.
The Nasdaq composite dropped 0.6% to close at 25,690.90. Alphabet Inc., the parent company of Google, fell 1.5% ahead of its quarterly earnings release. After trading closed, the company reported better-than-expected second-quarter results, suggesting its massive investment in artificial intelligence is beginning to pay off. Despite the strong report, Alphabet shares dropped another 2.9% in after-hours trading.
Tesla also had a rough day, with shares falling 1.3% during regular trading and another 4.1% after hours. The electric vehicle company, led by Elon Musk, reported that profits declined last quarter as the company poured more money into research and development, which cut into earnings even as vehicle sales rose sharply.
Wall Street investors remain focused on whether the enormous sums being spent on computer chips, memory, and other AI infrastructure will generate enough returns to justify the investment. That uncertainty has kept AI-related stocks at the heart of market volatility for several weeks.
Micron Technology swung between a 3.6% loss and a 1.2% gain before closing down 1.2%. The chipmaker had surged 14.4% in the first two days of this week, recovering nearly all of the 13.3% drop it suffered the previous week. The stock is still up 236% for the year.
Climbing oil prices are adding pressure to stock markets because higher energy costs eat into business profits and can reduce consumer spending. Early Thursday, Brent crude — the international benchmark — was up 2.2% at $96.14 a barrel, its highest price since early June.
Oil had fallen below $72 a barrel earlier this month, roughly the level it was at before the war with Iran began. But ongoing fighting has prevented oil tankers from using the Strait of Hormuz to move out of the Persian Gulf. Under normal circumstances, about one-fifth of all globally traded oil and natural gas passes through that narrow waterway.
U.S. benchmark crude rose 1.8% to $88.35 a barrel.
The U.S. military announced Wednesday that it had carried out a 12th consecutive night of strikes against Iran, with both sides increasingly targeting civilian infrastructure.
Higher energy prices risk reigniting inflation, which could prompt the Federal Reserve and other central banks around the world to raise interest rates — a move that would slow economic growth and weigh on the value of stocks and other investments.
The yield on the 10-year U.S. Treasury note climbed to 4.65% from 4.63% late Tuesday, and well above the 3.97% level it sat at before the conflict with Iran began. The rise has already helped push long-term U.S. mortgage rates to their highest point in nearly a year.
In currency markets, the euro rose to $1.1433 from $1.1414.
