Gulf conflict lifts oil, hits Asian markets

The escalating conflict in the Gulf, with the U.S. military conducting a ninth straight day of attacks against Iran and Iran striking targets across the region, has lifted oil prices. Brent Crude crossed $90 a barrel for the first time in over a month, and U.S. crude rose to $84.39. The Strait of Hormuz saw reduced transits, with one ship reported on fire. The jump in fuel costs revived inflation worries, leading futures markets to price in 29 basis points of United States — Federal Reserve rate hikes by year-end, with a 60% chance of a rate rise as early as September. Yields on 30-year Treasuries rose above 5%. Asian share markets slipped, with South Korea's chip-heavy market losing 4.2% after a 9% drop the previous week. The Philadelphia Semiconductor Index fell 10% last week, now 20% down from June's record high. Chinese AI firm Moonshot released a new model, Kimi K3, adding pressure on AI stocks. Major tech earnings from Alphabet, Intel, and Tesla are expected this week. The European Union — European Central Bank is expected to hold rates at 2.25% at its Thursday meeting. The yen remained near 40-year lows, with Japanese authorities flagging intervention threats. Gold fell 0.5% to $3,998 an ounce.