Asian markets tumbled on Monday, with South Korea’s Kospi Index plunging over 4%, as Brent crude climbed above $90 a barrel amid escalating US-Iran tensions. The chip-heavy index was dragged down by a 34% slump in Samsung Electronics and a 40% dive in SK Hynix from their yearly peaks. The sharp sell-off in semiconductor stocks, mirrored in ETFs like DRAM and SMH, coincided with a broader reassessment of AI-related valuations ahead of big-tech earnings from Alphabet, Tesla, and Intel this week.
Barclays and UBS analysts remain bullish on semis, citing strong demand and supply constraints. A Barclays note stressed that "demand for compute continues to exceed available supply," while UBS added that the selling appears to be passive position trimming rather than an exodus. Meanwhile, the oil spike—with Brent touching $90 and WTI nearing $85—has revived inflation fears and raised the prospect of further central bank tightening. Futures now price a 60% chance of a Fed rate hike in September, and the 30-year Treasury yield topped 5%.
For crypto markets, this macro brew is largely negative. Bitcoin and other digital assets tend to struggle when risk appetite fades, oil shocks stoke inflation, and hawkish monetary policy strengthens the dollar. The conflict-driven supply risks through the Strait of Hormuz, where shipping has already slowed sharply, add a tail risk of oil hitting $150—a scenario that AMP strategist Shane Oliver warns could become a global inflation shock. With tech earnings now a stress test for stretched valuations, any disappointment could accelerate a flight from risk, weighing further on cryptocurrencies already sensitive to equity drawdowns.
