Oil Prices Surge, AI Stocks Retreat as Middle East Conflict Escalates

Oil prices surged on Monday after renewed fighting in the Middle East, while losses in artificial intelligence (AI)-related technology stocks dragged global equity markets lower, Stan Choe reported for The Associated Press (AP).

Brent crude remained well below its wartime peak of nearly $120 per barrel despite the increase.

The price of Brent crude, the international oil benchmark, jumped 9.6 percent to $83.30 per barrel after both the United States and Iran claimed control over the Strait of Hormuz.

The conflict has disrupted tanker traffic through the strategic waterway, limiting crude oil shipments from the Persian Gulf and raising concerns over higher global fuel prices.

Oil prices climbed further after President Donald Trump announced the reinstatement of a blockade aimed at preventing tankers carrying Iranian oil from transiting the strait.

He also called for a 20 percent payment on all cargo receiving U.S. protection.

Despite the sharp increase, Brent crude remained well below its wartime peak of nearly $120 per barrel.

On Wall Street, the S&P 500 declined 0.8 percent, following four winning weeks out of the previous five. The Dow Jones Industrial Average fell 138 points, or 0.3 percent, while the Nasdaq Composite dropped 1.6 percent.

Semiconductor stocks led the decline. Micron Technology fell 4.4 percent, trimming what had been a remarkable 243.1 percent gain for the year.

The AI boom has driven strong demand for computer memory and other semiconductor products, fueling corporate earnings.

However, investors are increasingly questioning whether AI-related valuations have become excessive and whether demand can be sustained if the technology fails to deliver the expected gains in productivity and profitability.