Middle East energy facilities attacked successively, oil prices surge and break through $100 per barrel, Asia tech stocks rise on Nvidia gains, spot gold up 0.4%

The ongoing conflict in the Middle East is intensifying, with Iran escalating attacks on energy infrastructure in the Persian Gulf. Crude oil prices have rebounded strongly to over $100 per barrel after a series of declines. Meanwhile, optimistic outlooks for NVIDIA’s AI prospects provided brief support to Asian tech stocks, but the coexistence of these factors cannot mask the deep-seated multiple risks in the market.

On March 17, international crude oil prices surged rapidly, with WTI futures rising by 5%, breaking through the $97 per barrel level. Previously, Iran ignited a large gas field within the UAE, further exacerbating the already tight global fuel supply situation. Stock index futures indicate that European markets may open down 0.1%, while major US indices futures decline slightly more. The US dollar index touched 100, rising 0.19% intraday.

In the Asia-Pacific markets, there was a brief fluctuation. Jensen Huang on Monday forecasted that AI chip sales would surpass $1 trillion by the end of 2027, boosting Asian tech-related sectors. The Korea Kospi rose 2.4% at midday, and the Nikkei 225 increased 0.4%. However, Saxo Markets Chief Investment Strategist Charu Chanana warned that it is still premature to conclude that markets have fully shifted to risk appetite.

Market focus has quickly shifted to central bank policies. The Reserve Bank of Australia led the way on Tuesday by raising interest rates for the second consecutive time, warning that the Iran conflict poses dual threats to inflation and economic growth. The Federal Reserve will announce its rate decision on Wednesday, with market attention on whether inflationary pressures from rising oil prices will trigger a hawkish turn. BNY Mellon Market Strategist Bob Savage wrote in a report: “As the war with Iran continues, oil prices are dominating market sentiment, with news from the Strait of Hormuz influencing market direction. The key question this week is how central bank officials will weigh these factors.”

• The Korea Kospi rose 2.4% at midday, and the Nikkei 225 increased 0.4%. SK Hynix and Samsung Electronics rose 2.26% and 1.8%, respectively, while TSMC gained 1.6%.
• Stock index futures indicate that European markets may open down 0.1%, with US major indices futures slightly more negative.
• The US dollar index approached 100, up 0.19% intraday.
• The Japanese yen against the dollar neared the 160 level.
• US Treasuries declined across the board, with the 10-year yield rising 2 basis points to 4.23%.
• Crude oil surged, with WTI futures up 5%, breaking through $97 per barrel to $97.113.
• Gold rose for the first time in five days, with spot gold up 0.4% to $5,026.60 per ounce; silver surpassed $82, rising 1.8% intraday.
• London Metal Exchange aluminum prices briefly rose 0.9% to $3,415 per ton. Copper increased 0.2%, zinc up 0.1%.
• Bitcoin, supported by ongoing institutional inflows, remained above $74,000, approaching $74,500.

Strait of Hormuz: The Global Energy Lifeline Near Collapse

Navigation through the Strait of Hormuz has nearly come to a halt, though sporadic ships still pass through, with Iran-related vessels reaching wartime peaks. According to ship tracking data compiled by Bloomberg, in the past 24 hours, Iran-associated ships passing through surged to 12, a new high since the outbreak of conflict.

Trump has again called on other countries to assist in ensuring the safety of the strait and threatened to expand strikes on Iran’s key export hub, Hargeisa Island. However, Bloomberg reports that most countries have responded negatively to Trump’s calls, with few publicly supporting.

CIBC Private Wealth Group senior energy trader Rebecca Babin noted that with key Persian Gulf infrastructure continuing to be targeted, oil price forecasts have become significantly more uncertain. Maybank analysts added in a report: “As long as the flow through the Strait of Hormuz remains limited, high oil prices will continue to threaten inflation, corporate profit margins, and central bank policies.”

AI Chip Optimism Boosts Tech Stocks, but Sustainability of Gains in Doubt

On Monday, Jensen Huang showcased a series of new products aimed at increasing AI model processing speed and efficiency, and forecasted chip sales exceeding $1 trillion. This optimistic outlook quickly resonated in Asia-Pacific markets. Storage chip manufacturers SK Hynix and Samsung Electronics rose 2.26% and 1.8%, respectively, while TSMC gained 1.6%.

It is noteworthy that the pattern of Asian stocks rising alongside oil prices is unusual—since the outbreak of war, these two have mostly moved inversely, reflecting the region’s high exposure to Middle Eastern energy disruptions. Bloomberg strategist Garfield Reynolds commented:

“The sharp rise in oil prices puts stocks in a dilemma—regardless, they face pressure. The conflict could push yields higher, which also spells more pain for equities.”

Central Bank Decision Week: A Dilemma Under Dual Pressures of Inflation and Growth

The Reserve Bank of Australia was the first to act this week, raising interest rates twice in a row and explicitly pointing to inflation risks from the energy conflict, setting the tone for other central banks’ decisions. Market focus now shifts to the Federal Reserve—many worry that rising oil prices coupled with slowing economic growth could lead to stagflation, forcing the Fed to signal a hawkish stance. Indonesia’s central bank will also announce its rate decision this week, while the European Central Bank and Bank of England’s moves are closely watched.

The yen’s movement also concerns markets. The yen/dollar exchange rate neared 160, reflecting investor worries about Japan’s high energy import dependence. Traders expect the Bank of Japan to keep rates unchanged this week, with a rate hike of 25 basis points likely delayed until July. Ashwin Binwani, founder of Alpha Binwani Capital, is shorting the yen, stating:

“The yen will head toward 160; the Bank of Japan cannot prevent depreciation without raising rates. If oil prices don’t fall in the next three months, the yen could drop to 165.”

Priyanka Sachdeva of Phillip Nova noted that the focus remains on how long the conflict will last, when the Strait will normalize, and the long-term impact on Persian Gulf oil and gas infrastructure.

Aluminum Prices Rebound as Middle East Smelting Risks Persist

Aluminum prices rebounded after two days of decline, amid near-total blockade of the Strait of Hormuz, which hampers both exports of finished metals from smelters and the import of raw materials, prompting several companies to cut production. LME aluminum briefly rose 0.9% to $3,415 per ton. Copper increased 0.2%, zinc up 0.1%.

Additional disruptions threaten the aluminum market: Mozambique’s largest single-source aluminum supplier has shut down; Guinea, the world’s largest bauxite producer, is considering early export restrictions this year. This news caused alumina futures on the Shanghai Futures Exchange to surge 4.8% in a single day, hitting a seven-month high. Last week, aluminum prices soared to a four-year high, reflecting market sensitivity to supply disruptions in the Middle East (accounting for about 9% of global output).

In other markets, gold rose for the first time in five days, up 0.4% to $5,026.60 per ounce, while silver increased 0.65% to $81.24 per ounce. Bitcoin, supported by ongoing institutional inflows, remained above $74,000, approaching $74,500. US Treasuries declined across the board, with the 10-year yield rising 2 basis points to 4.23%. After recording its largest single-day decline in over a month on the previous trading day, the dollar stabilized on Tuesday.