The Middle East conflict continues to escalate, with Iran intensifying its attacks on energy infrastructure in the Persian Gulf, causing crude oil prices to rebound strongly to over $100 per barrel after a series of corrections. Meanwhile, the optimistic outlook for NVIDIA's artificial intelligence prospects provided temporary support for Asian tech stocks, but the coexistence of both scenarios cannot mask the underlying multiple risks in the market.
On March 17, international crude oil prices surged rapidly, with WTI crude futures rising by 5%, breaking through the $97 per barrel mark. This followed Iran igniting a large gas field within the UAE, further exacerbating the already tense global fuel supply situation. Stock index futures indicated that European markets might open down 0.1%, while major U.S. index futures showed slightly larger declines. The U.S. dollar index rose to 100, gaining 0.19% during the day.
The Asia-Pacific market experienced a brief fluctuation. Jensen Huang predicted on Monday that sales of AI chips would exceed $1 trillion by the end of 2027, which boosted Asian tech-related sectors. The Korea Composite Stock Price Index rose 2.4% at midday, and the Nikkei 225 index increased by 0.4%. However, Charu Chanana, chief investment strategist at Saxo Markets, warned that it is still too early to conclude that the market has fully shifted to a risk-on sentiment.
Current market focus quickly shifted to central bank directions. The Reserve Bank of Australia was the first to raise interest rates for the second consecutive time on Tuesday, warning that the war with Iran poses a dual threat to inflation and economic growth. The Federal Reserve is set to announce its interest rate decision on Wednesday, and whether the inflationary pressures from rising oil prices will trigger a hawkish shift is a key concern for the market. Bob Savage, head of market strategy at BNY, wrote in a report: &#34;As the war with Iran continues, oil prices are dominating market sentiment, and news from the Strait of Hormuz is influencing market direction. The core issue this week is how central bank officials will weigh these factors.&#34;
<blockquote>
<ul>
<li>U.S. stock index futures briefly plunged, with Nasdaq futures down 0.59% and S&amp;P 500 futures down 0.57%.</li>
<li>The Korea Composite Stock Price Index rose 2.4% at midday, and the Nikkei 225 index increased by 0.4%. SK Hynix and Samsung Electronics rose by 2.26% and 1.8%, respectively, while Taiwan Semiconductor rose by 1.6%.</li>
<li>Stock index futures indicated that European markets might open down 0.1%, with major U.S. index futures showing slightly larger declines.</li>
<li>The U.S. dollar index rose to 100, gaining 0.19% during the day.</li>
<li>The yen approached the 160 mark against the dollar.</li>
<li>U.S. Treasury bonds fell across the board, with the 10-year Treasury yield rising by 2 basis points to 4.23%.</li>
<li>International crude oil prices surged rapidly, with WTI crude futures rising by 5%, breaking through the $97 per barrel mark, reported at $97.113 per barrel.</li>
<li>Spot gold continued to decline, with the daily increase narrowing to 0.1%, reported at $5012 per ounce; spot silver briefly turned negative during the day, now up 0.09%.</li>
<li>Aluminum prices on the London Metal Exchange rose by 0.9% to $3415 per ton. Copper prices increased by 0.2%, and zinc prices rose by 0.1%.</li>
<li>Bitcoin, supported by continued institutional fund inflows, remained above $74,000, briefly approaching $74,500</li>
</ul>
</blockquote>
<h2>Strait of Hormuz: Global Energy Throat Nearly Paralyzed</h2>
Traffic through the Strait of Hormuz has nearly come to a standstill, but sporadic vessels continue to cross, with the volume of Iranian-associated ships reaching wartime peaks. According to ship tracking data compiled by Bloomberg, the number of Iranian-associated vessels crossing in the past 24 hours surged to 12, a new high since the outbreak of hostilities.
Trump has once again called on other countries to assist in ensuring the safety of passage through the strait and threatened to expand the scope of attacks on Iran's key export hub, Kharg Island. However, Bloomberg reports that countries have generally responded negatively to Trump's call, with very few openly supporting him.
Rebecca Babin, a senior energy trader at CIBC Private Wealth Group, pointed out that as critical infrastructure in the Persian Gulf continues to be targeted, predicting oil prices has become significantly more difficult. Maybank analysts added in a report, &#34;As long as progress in restoring normal traffic through the Strait of Hormuz remains limited, high oil prices will continue to threaten inflation, corporate profit margins, and central bank policy expectations.&#34;
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/4241abcb-1f77-4fc2-b4fb-6861a4c1240a.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/4241abcb-1f77-4fc2-b4fb-6861a4c1240a.png"/>
<h2>Optimistic Outlook for AI Chips Boosts Tech Stocks, Sustainability of Gains in Doubt</h2>
Jensen Huang showcased a series of new products aimed at enhancing the speed and efficiency of AI model operations on Monday, providing a $1 trillion chip sales forecast that quickly resonated in the Asia-Pacific markets. Memory chip manufacturers SK Hynix and Samsung Electronics rose by 2.26% and 1.8%, respectively, while Taiwan Semiconductor increased by 1.6%.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/3ae6be9e-ec24-43b5-a8d9-cfed2512c296.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/3ae6be9e-ec24-43b5-a8d9-cfed2512c296.png"/>
Notably, the simultaneous rise of Asian stock markets and oil prices is unusual—since the outbreak of war, the two have mostly moved in opposite directions, reflecting the region's high exposure to disruptions in Middle Eastern energy supplies. Bloomberg strategist Garfield Reynolds bluntly stated in his analysis:
<blockquote>
&#34;The sharp rise in oil prices puts the stock market in a dilemma—facing pressure regardless. The conflict could drive yields higher, which also means more pain for stocks.&#34;
</blockquote>
<h2>Central Bank Decision Week: Dilemma Under Dual Pressure of Inflation and Growth</h2>
The Reserve Bank of Australia was the first central bank to act this week, raising interest rates twice in a row and clearly pointing to inflation risks stemming from energy conflicts, setting the tone for decisions by other central banks. The market is currently most focused on the Federal Reserve—there are widespread concerns that the simultaneous rise in oil prices and slowing economic growth could force the Fed to signal a hawkish stance. Additionally, the Bank of Indonesia will also make a rate decision this week, while the movements of the European Central Bank and the Bank of England are closely monitored by the market.
The yen's movements are also affecting market nerves. The yen's exchange rate against the dollar is approaching the 160 mark, reflecting investors' concerns about Japan's high dependence on energy imports. Traders expect the Bank of Japan to maintain interest rates this week, with the next rate hike of 25 basis points likely postponed until July. Ashwin Binwani, founder of Alpha Binwani Capital, holds a bearish position on the yen, stating:
<blockquote>
&#34;Currently, the yen is heading towards 160, and the Bank of Japan cannot prevent depreciation without raising interest rates. If oil prices do not fall in the next three months, the yen will drop to 165.&#34;
</blockquote>
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/f527ee92-1dc5-44f1-9846-0e850433928e.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/f527ee92-1dc5-44f1-9846-0e850433928e.png"/>
Priyanka Sachdeva from Phillip Nova pointed out in a report that the focus of the energy market remains on how long the conflict will last, when the Strait will return to normal passage, and the long-term impact on oil and gas infrastructure in the Persian Gulf.
<h2>Aluminum Prices Rebound, Risks of Production Cuts in Middle Eastern Smelters Continue to Accumulate</h2>
After two consecutive days of decline, aluminum prices rebounded. The Strait of Hormuz in the Middle East is nearly completely blocked, which not only hinders smelters from exporting finished metals but also cuts off the supply of raw materials. Several companies have successively reduced production. Aluminum prices on the London Metal Exchange rose by 0.9% to $3,415 per ton. Copper prices increased by 0.2%, and zinc prices rose by 0.1%.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/e8425653-64b4-49b5-8028-770198f6c7bf.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/e8425653-64b4-49b5-8028-770198f6c7bf.png"/>
The aluminum market is also facing additional disturbances: the largest single source of aluminum supply in Europe—a smelter in Mozambique—has shut down; the government of Guinea, the world's largest bauxite producer, is considering restricting raw material exports as early as this year. This news has driven alumina futures to surge by 4.8% in a single day on the Shanghai Futures Exchange, reaching a nearly seven-month high. Last week, aluminum prices soared to a four-year high, reflecting the market's high sensitivity to supply disruptions in the Middle East, which accounts for about 9% of global production.
In other markets, gold rose for the first time in five days, with spot gold increasing by 0.4% to $5,026.60 per ounce, and silver rising by 0.65% to $81.24 per ounce. Bitcoin, supported by continued institutional inflows, remained above $74,000, briefly approaching $74,500. U.S. Treasury bonds fell across the board, with the 10-year Treasury yield rising by 2 basis points to 4.23%. After recording the largest single-day decline in over a month in the previous trading session, the dollar remained basically stable on Tuesday.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/a8d7ebd6-1d7c-4e93-ba43-787e1de5a78f.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/a8d7ebd6-1d7c-4e93-ba43-787e1de5a78f.png"/>

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International crude oil rapidly surged, with WTI crude oil futures increasing by 5%, breaking through the $97 per barrel mark. SK Hynix and Samsung Electronics rose by 2.26% and 1.8%, respectively, while Taiwan Semiconductor increased by 1.6%. The US dollar index touched 100, rising 0.19% during the day. Gold rose for the first time in five days, with spot gold increasing by 0.4% to $5026.60 per ounce, and aluminum prices briefly rose by 0.9% to $3415 per ton

- Ongoing conflicts in the Middle East have led to Iranian attacks on Gulf energy infrastructure, causing crude oil prices to rebound above $100 per barrel.  
- Global markets are showing signs of stress, with European stock futures indicating a slight decline and the U.S. federal decisions being closely watched amid inflation concerns.  
- Despite a positive outlook for AI chip sales boosting Asian tech stocks, analysts warn of the dual pressures on central banks regarding inflation and economic growth due to rising oil prices.

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Middle Eastern energy facilities have been consecutively attacked, causing oil prices to surge back above $100. Asian tech stocks are rising on the positive news from NVIDIA, and spot gold has increased by 0.4%