Global Markets Rattled as US-Iran Tensions in Strait of Hormuz Escalate

Global oil prices surged and tech stocks tumbled this week following severe military escalations between the United States and Iran. The conflict intensified after Iranian forces attacked a commercial vessel in the Strait of Hormuz—a route handling a fifth of global oil—and subsequently announced the closure of the critical waterway.

In response, the US launched targeted strikes against Iran, prompting Tehran to retaliate by hitting sites in Bahrain, Jordan, Kuwait, and Oman. US President Donald Trump warned of further military action but noted that a diplomatic agreement with Tehran remains possible. He additionally proposed a 20% tariff on cargo passing through the Strait, declaring the US its "guardian".

The renewed hostilities have heavily impacted global financial markets. Oil prices spiked by more than 9% on Monday, climbing an additional 1% on Tuesday. This sudden surge raises alarms about a fresh wave of inflation, which could force central banks to quickly hike interest rates. US Federal Reserve Governor Christopher Waller has already signaled potential near-term policy tightening if core inflation remains elevated.

Simultaneously, global equities took a significant hit, compounding recent flights from the tech sector. Asian markets, including Seoul, Tokyo, and Hong Kong, experienced sharp declines. South Korean chipmaker SK hynix faced a drastic selloff, reflecting growing investor anxiety that the recent artificial intelligence boom may have peaked.