Iran strikes U.S. military sites in the Gulf: global selloff in stocks, oil up

Key Points:

• Iran escalated conflict in the Middle East by striking 85 U.S. sites in Bahrain and Kuwait following U.S. attacks on Iranian coastal targets and Iranian fire on tankers in the Strait of Hormuz, leading to a spike in Brent crude oil prices from $72 to $78 per barrel.
• Despite the renewed hostilities, both the U.S. and Iran appear reluctant to engage in full-scale war, with recent U.S. strikes targeting less critical sites as a signal to limit the conflict, though the ongoing retaliations threaten to disrupt shipping in the strategic Strait of Hormuz for the foreseeable future.
• Global stock markets fell sharply amid the Middle East conflict, with major indices in the U.S., Europe, and Asia down significantly, while gold prices unexpectedly declined; Brent crude remained elevated around $77 per barrel.
• Tech sector shows divergent trends as semiconductor stocks soar due to strong pricing power, whereas AI hyperscalers like Meta, Microsoft, and Amazon face profit pressures from heavy capital expenditures on AI infrastructure, raising investor concerns about returns on these investments.
• U.S. entrepreneurship is seeing a shift with inherited businesses now outnumbering purchased ones, reflecting broader wealth transfer trends; meanwhile, political and economic developments continue to unfold, including scrutiny of Chinese AI models in U.S. companies and ongoing debates over U.S. foreign policy.