Oil prices slid on Monday as markets prepared for fresh details on a United States plan to squeeze Iran’s economy, with President Donald Trump calling it the “most crushing” financial campaign ever mounted against Tehran.
The move sent ripples through Asian markets, with most stocks falling in early trading as investors weighed the potential global impact of renewed economic warfare in the Middle East.
Samsung’s $80-billion buyback fails to calm markets
South Korea’s technology-heavy Kospi index dropped 1,4% after Samsung Electronics revealed it had spent $80-billion buying back its own shares following weeks of volatile trading.
The chip maker’s stock price, along with rival SK hynix, hit a peak in June on the back of excitement around artificial intelligence. But both have tumbled since then as investor confidence wavered and the broader technology sector took a beating.
With artificial intelligence dominating the week’s agenda, all eyes are turning to earnings results from Nvidia, the world’s most valuable company and a key indicator of the sector’s health.
The big question hanging over the US chip maker is whether the AI gold rush can keep accelerating as the technology spreads into more parts of the economy.
“The spending machine is still running, but the bill is getting heavier,” said Stephen Innes of SPI Asset Management. “Nvidia must now show that the most expensive investment boom in modern market history can still pay its bills.”
Alibaba raises $10,2-billion for AI push
Chinese technology giant Alibaba kept focus on the sector after announcing on Sunday it plans to issue $10,2-billion in new shares in Hong Kong to fund its global AI ambitions.
The company, known for its open-source “Qwen” AI models, has been pouring tens of billions of dollars into the technology. Shareholders are keen to see how it will turn those massive investments into actual profit.
Tokyo, Shanghai, Taipei and Wellington were all down on Monday. Sydney, Jakarta and Bangkok posted gains, while Manila and Kuala Lumpur were flat.
Hong Kong fell more than 2% despite fast-fashion giant Shein announcing its stock market debut will take place in the Chinese financial hub on 1 September.
The long-awaited listing would value the group, known for its huge selection of products at very low prices, at close to $27-billion.
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Iran sanctions threaten global oil supply
Markets are also watching US Treasury boss Scott Bessent, who said he would give more details at a news conference on Monday about a fresh push to pile economic pressure on Iran.
The United States warned allies and China on Thursday to join Trump’s new campaign, which comes as the unpopular war in the Middle East drags towards the six-month mark.
US Vice President JD Vance admitted the plan was a “delicate dance” because Iran will “try to apply economic pressure to us”.
Asked whether the United States would pressure China, Bessent told CNBC that “many conversations are best to have in private”, but called on Beijing “to get with the programme”.
Both main crude contracts were down 2,3%, with the Brent benchmark sitting at $92 a barrel.
Traders will also be watching this week’s annual gathering of central bankers, economists and finance chiefs in Jackson Hole in the United States, hoping for clarity on US monetary policy.
The meeting comes after the Treasury bought its own bonds last week in an effort to push down borrowing costs after the 30-year yield surged to levels last seen in 2007, just before the global financial crisis.
Yields have risen on inflation fears and as the United States reported that its federal debt had topped $40-trillion.
ALSO READ: Oil prices drop as Trump targets Iran with economic pressure
