(RTTNews) – European stocks are seen opening lower on Wednesday as a global tech sell-off deepened and rising U.S.-Iran tensions sent oil prices sharply higher, reigniting concerns around inflation and interest rates.
Iran has accused the United States of violating the peace agreement signed last month after the latter launched a major new wave of air strikes against Iran, targeting more than 80 military sites in response to Iranian attacks on three commercial shipping in the Strait of Hormuz.
The U.S. also revoked a waiver that had allowed the country to sell oil globally. The latest escalation in geopolitical tensions added another layer of uncertainty in financial markets and put the interim U.S.-Iran peace agreement at risk.
“CENTCOM forces remain postured and prepared to hold Iran accountable when the agreement is not adhered to or obeyed,” the U.S. military said in a statement.
Iran’s top joint military command said Iranian armed forces would deliver a “crushing response,” while warning that Tehran would not allow U.S. interference in the management of the Strait of Hormuz.
Investors may also adopt a cautious stance towards technology stocks amid concerns that the AI-fueled rally in chipmakers may be losing momentum.
As rising capital expenditures and competition become synonymous with rising semiconductor demand, doubts are mounting over whether future earnings growth can keep pace with current valuations of artificial intelligence-related and other chip companies.
Asian markets were broadly lower, even as Hong Kong’s Hang Seng index surged more than 2 percent after Reuters reported that China’s DeepSeek is developing its own chip to help power artificial intelligence systems.
The dollar held near a one-week high against its major peers as renewed U.S.-Iran tensions hit global risk appetite.
Gold held firm above $4,100 an ounce ahead of the release of the Federal Reserve’s June meeting minutes.
Brent crude prices surged nearly 3 percent toward $77 a barrel on concerns over supply disruptions in the Strait of Hormuz.
U.S. stocks ended lower overnight after reports of projective attacks on several vessels near the Strait of Hormuz sent crude prices sharply higher.
The tech-heavy Nasdaq Composite closed 1.2 percent lower as shares of Micron and other chip semiconductor firms fell on concerns the AI-driven rally may be overstretched. The S&P 500 dropped half a percent and the Dow eased 0.3 percent.
European stocks ended broadly lower on Tuesday amid a sell-off in AI-linked technology stocks. The pan-European Stoxx 600 fell 0.7 percent.
The German DAX lost 1.4 percent and France’s CAC 40 shed half a percent while the U.K.’s FTSE 100 ended 0.1 percent higher, led by energy stocks following Shell’s upbeat second-quarter guidance.
