Investors' hopes for peace in the Middle East appeared to be put to the test this morning. Asian stocks fell from record highs, while crude oil prices rose again on the latest escalation of tensions between the United States and Iran.
The situation has reignited concerns about global energy supply disruptions, testing the strength of the stock market rally.
Oil at $102 a barrel
News of a US military strike on Iran in the Strait of Hormuz has sent Brent crude prices soaring 2.3% to more than $100 a barrel. Investors are worried that the crisis could further prolong the closure of the Strait of Hormuz, the world's main oil route.
The MSCI Asia Pacific index also fell 0.9% as markets opened this morning. Although President Donald Trump described the attack as a "love tap" and claimed the ceasefire was still in effect, markets were still "terrified" by his stark warning on social media.
Investors Still Optimistic: “Buy When Prices Fall”
Interestingly, despite the bad news, many investors actually seem “calm”. Why? Because their main focus right now is on the booming rise of Artificial Intelligence (AI) technology.
South Korea Becomes World Stock ‘Champion’
Despite the turmoil in the Middle East, the South Korean stock exchange (Kospi) has emerged as the world champion so far this 2026.
This week alone: Up 11%.
Throughout 2026: Up 74%!
Investors are very confident in South Korean companies that are major suppliers of components for global AI development. This proves that interest in the technology sector still outweighs fears of war in some places.
Other Issues: Trump Tariffs Overturned by Court
In another surprising development, the US federal trade court has declared that Trump’s proposal to impose a 10% global tariff is invalid. This is a major blow to Trump’s economic agenda of trying to impose import taxes without the approval of Congress.
What’s Next?
The world is now awaiting the US jobs data to be released tonight. If the US jobs market remains strong, it may provide some relief to the economy.
But for us in Asia, the focus remains on the Strait of Hormuz. As long as the issue of “Project Freedom” (the US effort to escort merchant ships) is not resolved and Tehran does not give a positive response, the market may continue to be in a “roller coaster” state.
In conclusion, while the geopolitical news may seem scary, the momentum of the global economy, especially in the AI sector, is still strong. Don’t panic, but stay alert!
