Global stock markets extended their losses on Wednesday as a sell-off in technology shares intensified and oil prices rose following fresh US military action near the Strait of Hormuz. The escalation between Washington and Tehran has injected fresh uncertainty into financial markets already rattled by inflation fears and a reassessment of high-flying tech valuations.
The US military launched airstrikes early Wednesday after an Army helicopter crashed near the strategic waterway, an incident President Donald Trump attributed to Iran. Tehran responded defiantly, vowing it “will leave no attack or threat unanswered.” The clash has raised doubts about any near-term resolution to a conflict that has now dragged on for over three months, unsettling investors who had hoped for a de-escalation.
Oil Prices Climb on Supply Concerns
Brent crude, the international benchmark, rose 0.9% to $92.30 a barrel, recovering from the previous day’s decline. Before the conflict erupted in late February, Brent traded at roughly $70 a barrel. US benchmark crude gained 1% to $89.04 a barrel. The Strait of Hormuz, through which about a fifth of the world’s oil passes, remains a flashpoint; any sustained disruption would have immediate consequences for European energy importers already grappling with elevated prices.
“The situation remains highly volatile,” wrote ING commodities strategists Warren Patterson and Ewa Manthey in a note. “This once again demonstrates the difficulty Iran and the US face in working towards a sustainable ceasefire that allows for the free flow of vessels through the Strait of Hormuz.” They added that seasonal demand remains strong, adding upward pressure on prices. The impact on European airlines has been severe, as jet fuel costs have surged, cutting global airline profit forecasts in half.
The broader energy market disruption is also weighing on the eurozone economy, which contracted by 0.2% in the first quarter of 2026 as the Iran war disrupted energy supplies and raised costs for businesses and households across the continent.
Tech Sell-Off Spreads from Wall Street to Asia and Europe
Technology stocks bore the brunt of the selling pressure as investors worried that persistently high inflation could force the US Federal Reserve to raise interest rates, hurting growth companies that rely on cheap borrowing and future earnings expectations. The sell-off, which began on Wall Street, quickly spread to Asian and European markets.
In Asia, South Korea’s Kospi fell 4.7%, with Samsung Electronics dropping 5.8% and SK Hynix losing 6.3%. Japan’s Nikkei 225 declined 1.4%, dragged down by an 8.9% plunge in SoftBank Group, which has significant exposure to AI-related investments. However, chipmaker Tokyo Electron bucked the trend, advancing 5.3%. Hong Kong’s Hang Seng Index lost 1.1%, while mainland China’s Shanghai Composite slipped 0.7%.
On Wall Street, the S&P 500 fell 0.3% on Tuesday, while the technology-heavy Nasdaq composite dropped 1%. Chipmakers were particularly hard hit: Micron Technology swung from an early 4% gain to a 10% drop before closing 1.4% lower, Marvell Technology fell 7.6%, and AMD lost 3%. The rout reflects growing unease that the AI-driven rally since March may have pushed valuations beyond sustainable levels.
European markets are closely watching the US inflation data due later this week, with economists expecting consumer prices to rise at their fastest annual pace in more than three years. Higher energy prices linked to the Iran conflict are adding to inflationary pressures, complicating the European Central Bank’s policy calculus as it tries to support growth without stoking price rises.
In currency markets, the US dollar was little changed at 160.36 yen, while the euro edged up to $1.1550. Gold fell 2% to $4,197.60 an ounce in early European trading, as investors shifted toward cash and short-term bonds.
The confluence of geopolitical risk, inflation anxiety, and tech valuation concerns suggests that volatility will remain elevated in the weeks ahead. For European investors, the key question is whether the ECB can navigate a path between containing inflation and avoiding a deeper economic slowdown, especially as energy costs continue to rise.
