Global · 2026-07-09
Iran-Kuwait-Bahrain clashes intensify, oil prices spike
Concerns over escalation grew after reports that Iran's Revolutionary Guard struck two U.S. bases each in Kuwait and Bahrain. U.S. Central Command also confirmed it had carried out strikes on around 90 Iranian military sites, with attacks continuing on both sides. President Trump had said the previous night that this was not an escalation, but the day's developments shook that assessment again.
WTI crude jumped about 3% to touch $74. Asian markets were mostly risk-off, with Taiwan's index flat and Hong Kong's Hang Seng and Shanghai Composite turning negative.
[Global] US-Iran Tensions Reignite, Oil Spikes as Dollar Weakens
President Trump, attending the NATO summit, suggested the ceasefire with Iran was effectively over, rattling markets. He said he did not want to deal with Iran and suggested the US could destroy every bridge in Iran if necessary, in remarks that added to the hawkish tone.
Iran had earlier fired missiles and drones at some Gulf allies, though reports indicated no major damage. The US then launched retaliatory strikes over the ship attacks, and reports of a further round of strikes emerged after the market close, heightening geopolitical uncertainty.
Trump said the US was considering re-blockading the Strait of Hormuz and possibly striking desalination facilities, while Iran also raised the prospect of blocking the strait. As a result, crude oil prices surged nearly 10% in two days, with WTI trading below $74 and Brent around $78.
Still, Trump's remarks downplaying the chance of renewed full-scale war helped calm markets, and banks including JPMorgan noted that neither the US nor Iran wants a prolonged conflict, which capped the oil rally. The dollar index actually weakened even as oil rose, while the 10-year Treasury yield climbed on both the oil move and the FOMC minutes.
[Global] China AI Stock Rally Signals Capital Rotation from Korea, US
Chinese online retailer Alibaba surged nearly 12% Wednesday, leading a broader rally in Chinese tech shares. E-commerce platform JD.com and Baidu also advanced as China AI-related stocks rose broadly.
Over the same period, investors kept selling US and Korean memory-chip stocks, prompting interpretations that capital was rotating out of Korea and into China. Some argued Chinese AI firms' low chatbot pricing could reshape industry dynamics.
Alibaba, despite pouring huge sums into large-language-model development with little share-price payoff, rebounded after an analyst briefing indicated narrowing losses and improving profitability in its June-quarter commerce business. Its valuation stands at roughly 15 times earnings.
DeepSeek's per-token pricing remains far below OpenAI's, while Zhipu AI's GLM model ranked among the top-performing models, underscoring the price competitiveness of Chinese AI models.