Asian shares rise as AI boom offsets Gulf peace talk worries

Investors kept leaning into the AI trade on Monday, pushing Asian shares higher even as stalled Gulf peace talks darkened the outlook for energy costs and broader risk appetite. The split screen was clear in price action: Japan’s Nikkei rose 0.5%, South Korea gained 1.3%, and MSCI’s broad Asia-Pacific index outside Japan added 0.2%, while oil moved the other way, with Brent crude up 1.9% at $92.89 a barrel and U.S. crude up 2.4% at $89.46.

The strongest enthusiasm remained concentrated in AI-linked markets. Taiwan, home to key semiconductor makers and suppliers, had risen almost 6% last week, adding to the 5% jump in Japan’s Nikkei and an 8% weekly surge in South Korea. The pattern showed how investors were rewarding the hardware backbone of the AI boom, especially chips and related equipment, even as the wider macro picture was unsettled by geopolitics and higher energy prices.

That resilience is being tested by uncertainty over the Strait of Hormuz, one of the world’s most important oil chokepoints. Talks on reopening the waterway after a peace deal had stalled, and President Donald Trump had been notably silent on the latest progress, leaving traders without a clear signal from Washington or Tehran. Just a week earlier, on May 25, discussions had centered on a plan to reopen the strait about 30 days after a deal to end hostilities. The delay has kept a geopolitical premium in crude and raised the risk that any relief could come slowly.

Michael Feroli of JPMorgan said the “acute risk phase for the global economy should be over if tankers can begin moving again,” but warned that oil prices could stay elevated because inventories need rebuilding and Middle East infrastructure needs repair. That caution underscores the market’s current balance: AI optimism can support stocks for now, but it cannot fully erase the threat of a sustained energy shock.

The AI narrative also had a visible catalyst in Taipei, where Nvidia chief executive Jensen Huang opened Computex with a keynote focused on AI and Taiwan’s role in the industry. For investors, that was the cleanest expression of the current trade: semiconductors, advanced computing and the companies that supply them are still absorbing the optimism, while oil, shipping routes and Middle East tensions remain the clearest channels through which macro fragility can return.