Oil holds gains as US futures slip on war confusion, AI stocks rebound

Oil prices held their gains while U.S. futures slipped, a sign that investors are still trying to price two very different stories at once: a Middle East conflict that could tighten energy supplies, and an AI boom that continues to pull money back into technology shares.

The crosscurrents were visible across global markets. Stocks erased earlier losses as buyers returned to AI-linked names after a brief pullback, but MSCI’s regional equity index still fell 0.5% and South Korea’s Kospi dropped 1.8% after a staggering 105% rally this year. In another Asia trading session, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4% as investors leaned back into favored AI plays, yet a separate update showed the same benchmark down 0.6% in choppy trade, with Korean shares tumbling as much as 3.3% after opening higher. The message was the same in both cases: traders were not comfortable, even when they were willing to buy.

That split matters because it reaches well beyond Wall Street. Higher crude prices can feed through to gasoline, freight costs and eventually consumer inflation, which is why oil’s resilience matters for U.S. households even before it shows up at the pump. The World Bank projected on April 28 that energy prices would jump 24% this year to their highest level since 2022, when Russia’s invasion of Ukraine sent commodity costs sharply higher. If that forecast proves accurate, drivers, airlines and delivery companies would all face a more expensive operating backdrop.

The energy market is already reflecting that pressure. U.S. crude exports climbed to a record 5.6 million barrels a day in May as the Middle East crisis boosted demand from Asian and European refiners. That is a sign the conflict is not just a geopolitical headline, but a live force in global trade flows and pricing.

For investors, the bigger question is whether this is a temporary shock or the start of a broader repricing. The rebound in AI shares suggests markets still believe earnings growth can outrun the noise from war, at least for now. But if oil stays elevated and the ceasefire doubts deepen, the cost could show up in more than energy bills. It could start to weigh on margins, inflation expectations and the retirement accounts tied to the same index funds that powered the market’s recent gains.