World markets took a step back on Thursday as oil prices surged by over 2% after reports from Iran’s state television indicated that seven oil tankers caught fire in the Strait of Hormuz. If confirmed, this would be the highest number of vessels damaged in a single day since the conflict with Iran began on February 28.
Brent crude oil, which is the global benchmark, rose by 3.2%, reaching $112.27 per barrel. It’s been fluctuating between $97 and $112 recently due to questions about when the situation with Iran will stabilize enough for the global energy market to return to normal. Meanwhile, U.S. benchmark crude also increased, climbing by 2.8% to $99.80 per barrel.
In early trading in Europe, Germany’s DAX index fell by 1.1%, settling at 25,367.96. The CAC 40 in Paris dropped 1.3% to 7,816.67, while Britain’s FTSE 100 declined by 0.7%, landing at 10,678.67. Futures for the S&P 500 were down by 1%, and the Dow Jones Industrial Average futures fell by 0.7%.
Over in Asia, the Nikkei 225 in Tokyo suffered a 2.7% drop, bringing it to 62,907.84, mainly due to significant sell-offs in major tech companies like SoftBank, which lost 6.9%. Other tech firms were impacted as well, with Tokyo Electron decreasing by 7% and Advantest retreating by 6%.
In South Korea, the Kospi saw a decline of 3.5%, hitting 5,533.77, primarily driven by losses in major memory chip manufacturers. Samsung Electronics fell by 4%, and SK Hynix reported a 5.5% drop.
AI-related stocks, which have been in the spotlight for months, are facing pressure as concerns grow about the rising costs of borrowing money and the potential slowdown in the construction of new data centers.
In Hong Kong, the Hang Seng index went down by 3% to 22,934.68, while the Shanghai Composite index edged down 1.5% to 3,658.03. Taiwan’s Taiex saw a loss of 1.8%, and Australia’s S&P/ASX 200 fell by 0.4%, reaching 8,793.20.
In the U.S., stock markets climbed on Wednesday, boosted by strong earnings from major companies such as SpaceX and Capital One Financial. The S&P 500 saw an increase of 0.6%, and the Dow Jones Industrial Average rose by 0.7%. The Nasdaq composite gained 1.1%.
SpaceX led the charge with a 7.8% surge after reporting better-than-expected summer profits. Elon Musk, the company’s CEO, also hinted at a potential merger with Tesla, which itself rose by 3.4%, contributing to the S&P 500’s gains.
Other companies reporting positive earnings included Capital One Financial, which jumped 2.5%, and Winnebago Industries, which soared by 10.7%. There are high expectations for profit growth across the board, and companies need to meet these expectations as they deal with challenges like inflation and rising interest rates.
In an interesting turn, Netflix saw its shares dip by 5.3% despite reporting stronger-than-expected profits, as investor concerns grew regarding potential slowdowns in the company’s momentum.
As for currency exchanges, the dollar dropped to 157.22 Japanese yen from 158.14 yen on Wednesday, while the euro slipped slightly to $1.1231 from $1.1233.
