AI chip rally lifts stocks, oil jumps as Iran peace talks stall

Chip stocks rose on renewed AI spending optimism while oil jumped more than 2% to $107.97 a barrel in Asian trade, a split that could help tech-heavy portfolios while threatening higher gasoline, freight and airline costs for U.S. households.

The oil move reflected stalled U.S.-Iran peace talks, which kept pressure on Gulf shipping and left markets focused on the shuttered Strait of Hormuz, a chokepoint for global crude and gas flows. The average LNG price for June delivery into northeast Asia was $16.70 per million British thermal units last week, nearly 61% above pre-war levels, and Goldman Sachs lifted its year-end Brent forecast to $90 from $80, citing a slower return to normal Gulf exports. President Donald Trump cancelled a trip to Islamabad by U.S. envoys for weekend talks, while an Axios report said Iran wanted a deal on reopening the strait first and to postpone nuclear talks.

The energy shock pushed inflation concerns back into view and helped traders all but price out rate cuts in developed markets this year. S&P 500 futures were flat in Asia after U.S. stocks closed at record highs late the prior week, underscoring how quickly investors were willing to separate the oil risk from the tech boom. Currencies moved only slightly, with the euro at $1.1725 and the yen at 159.26 per dollar, and bond markets stayed calm ahead of central bank meetings in Japan, the United States, Britain, Europe, Canada and several emerging markets.

At the same time, semiconductor shares kept climbing on the belief that AI spending still has room to run. Intel’s forecast last week for second-quarter revenue above Wall Street expectations triggered another round of buying, extending a rally that had already pushed the Philadelphia SE Semiconductor Index up for 18 straight sessions through Friday and more than 47% year to date. The total value of South Korea’s chipmaker-heavy stock market has now climbed above Germany’s, a sign of how far the semiconductor trade has outperformed other industrial centers.

The week ahead will test whether that enthusiasm can survive a heavy run of earnings. Companies representing 44% of the S&P 500 by market capitalization are set to report, including Microsoft, Alphabet, Amazon and Meta Platforms on Wednesday, followed by Apple on Thursday. Investors will be watching capital spending plans closely for clues about whether AI infrastructure demand is still accelerating or merely overheating, even as geopolitical stress keeps a floor under oil prices.