Asia Stocks Slip as Oil Tops $90 on Iran Strikes
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- Brent crude climbed 3% past $90 a barrel for the first time in more than a month as the US began a ninth straight day of strikes on Iran, with Iran retaliating against targets across the region.
- Fed futures now imply 29 basis points of rate hikes by year-end and a 60% chance of a September move, pushing 30-year Treasury yields back above the psychological 5.0% barrier.
- The Philadelphia Semiconductor Index shed 10% last week, leaving it 20% below June's record high, as Chinese AI firm Moonshot unveiled its Kimi K3 open-weight model claiming performance approaching Anthropic's frontier Fable.
- Japan's Nikkei was closed for a holiday after losing 6.4% last week in a tech-led rout, while South Korea's chip-heavy KOSPI dropped another 0.6% on top of last week's near-9% plunge as retail investors were squeezed out of leveraged positions.
- S&P 500 futures edged up 0.2% and Nasdaq futures firmed 0.4% ahead of earnings from Alphabet, Intel, and Tesla, with BofA's Savita Subramanian forecasting a 5% consensus beat and 28% earnings growth led by semiconductors (expected +130% YoY).
- The ECB meets Thursday and is expected to hold rates at 2.25%, with markets almost fully pricing a September rise and 2.75% early next year.
- The dollar held at 162.41 yen — just below its recent 40-year peak — as Japan flagged possible intervention, while gold fell 0.6% to $3,993/oz under climbing yields.
Why it matters: Tech-heavy Asia is taking the heaviest hit — South Korea's chip market is down nearly 10% in a week and the Philadelphia Semiconductor Index sits 20% below its June peak — as an oil-driven inflation shock collides with revived Fed-hike odds right before Alphabet, Intel, and Tesla report. A 30-year Treasury yield above 5% raises the bar for every earnings beat BofA is forecasting.
