Iran's Islamic Revolutionary Guard Corps fired ballistic missiles at American forces in the Middle East on Wednesday, puncturing days of relative calm and sending crude oil prices sharply higher. US Central Command said the missiles were successfully intercepted. President Trump told Fox News that the US would retaliate hard, an announcement that immediately rattled energy markets.

Brent crude futures, the main international benchmark, gained about 6.5% to reach $89.52 a barrel, according to CNBC. US West Texas Intermediate futures rose about 6.3% to $84.26. The move extended a year of extraordinary volatility in energy markets that began when the US and Israel struck Iran in late February.

A war that refuses to pause

The missile strike came after a brief lull in fighting had pushed oil prices lower on hopes that a ceasefire might resume. Those hopes have now dissolved. Tehran has also rejected an Omani proposal to divide control of the Strait of Hormuz, the narrow waterway through which roughly 20% of the world's oil passes, according to the Wall Street Journal, as reported by AGBI. Iran separately warned it would block commercial vessels linked to countries receiving compensation from its frozen assets from transiting the strait.

Houthi rebels, backed by Tehran, added to supply anxieties on the same day. The group declared a maritime embargo against Saudi Arabia last week and fired on two tankers in the Red Sea. Bjorn Vang Jensen, Executive Industry Advisor at Xeneta, told CNBC that Houthi strikes on oil production, storage and port infrastructure could disrupt supply across the region.

“"The spike in oil prices has been compounded by Chairman Kevin Warsh's somewhat hawkish tone at his first FOMC meeting as Fed chair, and traders remain split on the central bank's decision due Wednesday." — Kitco”

Chip stocks add a second front of market pain

Wednesday's oil surge landed against an already fragile backdrop in equity markets. Semiconductor stocks have shed more than $1 trillion in value in recent weeks as investors reassess the AI spending boom that drove an extraordinary rally through the first half of the year. The Philadelphia Semiconductor Index retreated for a fourth consecutive session on Tuesday, its longest losing streak of 2026, according to Bloomberg. The Nasdaq 100 fell 1.8%, putting the index on course for a correction after dropping 10% from its last record.

South Korea was among the hardest hit. SK Hynix closed 9.61% lower on Wednesday after earlier dropping over 15%, according to CNBC, despite posting record quarterly profit and revenue. Samsung Electronics also fell sharply. The KOSPI index briefly halted trading the previous session after plunging 8% under the country's circuit-breaker mechanism, which is designed to slow panic selling; it eventually closed around 10% lower.

“"Investors are reassessing whether near-term revenues can justify unprecedented AI spending levels, while some also worry about growing competition in chips and AI infrastructure." — Charlie Dai, VP principal analyst at Forrester”

Bloomberg analysis noted that a UBS basket of shares tied to AI spending is trailing a basket of stocks seen as vulnerable to AI disruption by a record 42 percentage points. Analysts at Forrester argue the selloff is less a sign of collapsing demand and more a repricing after an exceptionally strong rally. Chinese internet stocks listed in Hong Kong offered a rare bright spot, with Tencent and Meituan trading higher as investors rotated away from hardware plays. For global markets now navigating a fresh Middle East escalation alongside a technology correction, the double stress test is a reminder that geopolitical risk and valuation risk rarely arrive one at a time.

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