Oil slides as US–Iran de-escalation eases supply fears while global tech stocks rout on AI worries

Oil prices retreated and global technology shares plunged on Tuesday after signs of renewed diplomacy between the United States and Iran eased concerns about crude disruptions through the Strait of Hormuz, even as worries about the outlook for artificial intelligence-led investment sent chip and tech stocks sharply lower.

What happened markets react to de-escalation and AI doubts

Brent crude was reported trading at US $88.36 per barrel on Tuesday morning. The earlier steep falls on Monday came after reports that diplomatic efforts between the United States and Iran and possible talks involving Oman had raised hopes of restarting shipping through the Strait of Hormuz, a route through which a significant share of global oil and liquefied natural gas normally pass. International benchmark Brent had fallen more than 8 percent on Monday and WTI more than 7 percent the same day; both were down more than 1 percent in Asian trade.

US and Iran step back from tit-for-tat strikes

The market move followed reports that the United States and Iran had paused retaliatory attacks after nearly two weeks of clashes. Former US president Donald Trump was quoted saying aboard Air Force One:

“I have a lot of patience… We’ll see what happens. I think there is a good chance that something could happen.”

Tech rout deepens semiconductor sector hardest hit

Across Asia, technology and semiconductor stocks bore the brunt of selling. South Korea’s Kospi index collapsed, falling 10.2 percent to 6,066.21. Seoul-listed SK hynix and Samsung were reported to have lost around 13 percent, dragging the Kospi down and triggering an earlier 20-minute circuit-breaker. The source said both firms had declined almost 50 percent since hitting all-time highs the previous month and that the Kospi was down more than 30 percent.

Tokyo’s Nikkei 225 fell more than 4 percent, with Kioxia down 18 percent and other chip-related names plunging. Taipei and other Asian markets also recorded notable losses. The sell-off extended losses seen on Wall Street, where the Philadelphia Semiconductor Index declined and individual chip names and AI beneficiaries gave up substantial gains.

Why investors sold

The rout followed a period of extraordinary gains for AI-related stocks and mounting questions about whether the vast sums poured into AI would soon generate returns. The Information reported a development in China’s chip industry that intensified concerns, and some investors began to re-price lofty valuations.

“The immediate fundamentals of semiconductors have not collapsed,” wrote Stephen Innes at SPI Asset Management. “Demand for high-bandwidth memory remains strong, hyperscalers are still spending, and the largest technology companies have not yet abandoned their capital expenditure plans. What has changed is the market’s willingness to capitalise those promises at almost any price.”

Market snapshot

The report listed several market moves around 5:30am South African time:

• Rand: R16.80 to the US dollar
• Seoul Kospi: DOWN 10.2 percent at 6,066.21
• Tokyo Nikkei 225: DOWN 4.3 percent at 62,159.48
• Hong Kong Hang Seng Index: FLAT at 25,204.90
• Shanghai Composite: DOWN 0.6 percent at 3,836.53
• Euro/dollar: UP at $1.1378
• Pound/dollar: UP at $1.3301

What to watch next

Traders were noted as awaiting upcoming earnings from major chipmakers and large technology companies. The snapshot in the report highlighted an ongoing focus on corporate results that could clarify demand for semiconductors and the pace of technology capital spending.

For now, markets remained sensitive to developments on two fronts: diplomatic progress that could ease physical supply risks to oil shipments through the Strait of Hormuz, and fresh data or company updates that might resolve questions about the sustainability of the AI-led rally in tech stocks.