Futures Slide, Oil Surges as US-Iran Conflict Escalates and Korean Chip Rout Deepens

US equity futures declined Monday as escalating US-Iran hostilities drove crude oil sharply higher and a violent selloff in South Korean technology stocks spilled over into global semiconductor names.

S&P 500 futures slipped 0.4% in early trading, reversing Friday’s gains that had pushed the index just shy of a record, according to Zero Hedge. Nasdaq 100 futures lost 1%, led lower by memory chip makers after SK Hynix plunged by a record 15% in Seoul trading. The company’s American depositary receipts fell 8% in premarket action.

The latest wave of attacks between the US and Iran dashed hopes for a near-term normalization of traffic through the Strait of Hormuz, the critical chokepoint for global oil shipments. Brent crude climbed as much as 2.8% to $85.64 a barrel, according to the Economic Times. Earlier in the session it had jumped 5% before paring gains to trade around $78.50, Zero Hedge reported. West Texas Intermediate crude for August delivery rose 4.62% to $82.60 per barrel, per Nasdaq.

Treasuries edged lower as traders reassessed the odds of a Federal Reserve interest-rate hike. Money markets priced in about a 50% chance of a rate increase in July, the Economic Times said, citing comments from Fed Governor Christopher Waller that officials may need to tighten policy if inflation remains stubborn. The two-year Treasury yield rose one basis point to 4.29%, the highest since February 2025, while the benchmark 10-year yield climbed to 4.63%.

Investors are now bracing for a week packed with catalysts, including the June US consumer price index due Tuesday, Fed Chair Kevin Warsh’s first congressional testimony, and the start of earnings season. CPI is expected to slow to 3.8% year-over-year from 4.2% in May, based on a Bloomberg survey of economists cited by the Economic Times.

“If we get another hot reading on core inflation this week, then the FOMC will need to consider tightening monetary policy in the near term,” Waller said Monday, as reported by the Economic Times.

**Korean Tech Rout Spreads**

The selloff in Seoul was centered on SK Hynix, which fell by the most on record, reflecting growing investor concern that the artificial-intelligence boom has become overextended. The Kospi index suffered its seventh marketwide circuit breaker for 2026, Zero Hedge reported, citing the volatile swings driven by leveraged ETF flows and retail frenzy.

“The sharp selloff in Korean equities from the June peak is raising questions with some investors regarding the sustainability of the AI trade more broadly,” said Daniel Murray at EFG Asset Management, according to Zero Hedge.

The rout spilled into US premarket trading, with Micron and Sandisk falling sharply, Zero Hedge said. SK Hynix ADRs dropped 7.9% in early trading. Taiwan Semiconductor Manufacturing Co. reported quarterly sales rose 36%, meeting high expectations, but that news failed to stem the broader tech weakness.

“The energy sector is once again in the limelight as the status of the Strait of Hormuz is driving price action in global markets,” Ian Lyngen at BMO Capital Markets told the Economic Times. “There is a growing sense that the situation is likely to get worse before it de-escalates.”

**Iran Strikes and Strait Closure**

The US and Iran have exchanged strikes for six consecutive days, according to a Nasdaq report. The US targeted civilian and energy infrastructure, including an airport, a railway station, and two bridges. Iran retaliated with widespread strikes on Qatar, Oman, Jordan, Bahrain, and Kuwait, where a power plant and a desalination plant were damaged.

The Strait of Hormuz remains closed, blocking all vessel movements and crippling oil and energy trade across the Arabian Gulf, Nasdaq reported. The US re-imposed a naval blockade on Iranian ports and sanctions on Iranian oil exports after a brief truce in June collapsed. US Central Command said forces are ready to escort vessels, but shipping traffic has been sharply reduced amid sea mine, missile, and drone threats.

Despite the intensified conflict, both sides have left the door open for talks. The White House said President Donald Trump was open to diplomacy, and White House spokesperson Karoline Leavitt acknowledged the US is in talks with Iran, Nasdaq reported. Iran’s Parliamentary Speaker Mohammad Bagher Ghalibaf stated that “doors are open for talks.”

Gold and silver retreated as the dollar held steady. European stocks were little changed, with telecom and energy shares outperforming while tech lagged.

“Uncertainty around the Middle East continues, but we think the AI wave is what will drive markets over the next few weeks, especially as earnings season kicks off,” Sonu Varghese at Carson Group said, as quoted by the Economic Times.