Hormuz concerns lift oil prices as cyclical stocks lag

Market Commentary

Crude oil climbed on Tuesday, extending gains to just over 5% and trading around $75 a barrel as tensions in the Middle East intensified. According to reports, a US official said the Treasury Department is revoking the waiver that had allowed Iran to sell oil following recent attacks in the Strait of Hormuz. Iran’s foreign minister warned that final peace talks will not advance while security threats persist. Meanwhile, US President Donald Trump said the parties must reach an agreement or face renewed US action, reviving the prospect of military involvement.

US equities ended lower, weighed down by a sharp sell‑off in semiconductor stocks and renewed concerns over the global economic outlook. At 21h21 SAST the S&P 500 declined 0.55% and the Nasdaq 100 closed just over 1% lower, with losses in large‑cap technology names offsetting earlier gains. The Dow also finished lower. The US dollar strengthened modestly, the dollar index edging back towards the 101 level after two consecutive sessions of losses; the currency’s gains came despite only a muted response to higher oil prices.

Semiconductor shares were under significant pressure despite Samsung reporting a 19‑fold increase in quarterly profit, as investors questioned whether heavy investment in artificial intelligence (AI) infrastructure by hyperscalers can be sustained. Micron, Sandisk and Applied Materials each fell between 8% and 10%, while SpaceX declined 6% following its inclusion in the Nasdaq 100. Nvidia lost 1.50% and AMD dropped 8% after reports suggested China’s DeepSeek is developing its own AI chip. Beyond technology, cyclical stocks also weakened: industrials were hardest hit, with Caterpillar, Deere and GE Vernova each down between 5% and 10%.

European markets also weakened, ending the day lower as rising sovereign yields and renewed tech selling weighed on sentiment. The Euro STOXX 50 fell 1.10% to close at 6 329 and the STOXX Europe 600 declined 0.50% to 647. Technology led losses: ASML dropped 7.30% and Infineon retreated 8.30%, as investors reassessed the elevated valuations behind the AI rally. Data‑centre names were hit too, with Siemens and Schneider Electric down around 4% and Siemens Energy sliding 9%.

The FTSE 100 bucked the regional trend, rising 0.30% to a four‑month high, helped by stronger energy names: Shell climbed 3.80% after flagging materially stronger second‑quarter gas trading, and BP added 1.70% as oil prices moved higher.

Asian markets closed lower, led by broad weakness in technology and semiconductors. Investor caution over AI‑driven valuations outweighed stronger‑than‑expected preliminary guidance from major techs such as Samsung. Japan’s Nikkei 225 fell more than 2%, China’s Shanghai Composite lost 1.29% and Hong Kong’s Hang Seng declined 0.66%.

South Africa’s Johannesburg Stock Exchange All Share Index and the Top 40 dropped 0.75% and 0.76% respectively, with resources and metals and mining leading losses at 2.71% and 3%. The rand weakened, trading at R16.29 to the US dollar at 21h46 and R18.60 to the euro.