Oil Price Surge Exposes AI Spending Risks as Global Markets Crumble

Global stock markets are facing intense pressure this summer due to rising oil prices, growing concerns over AI investment returns, and the reintroduction of tariff policies. The Strait of Hormuz has seen a significant drop in traffic volume, with only six ships passing through on Thursday, down from pre-war levels.

The resulting increase in oil prices has pushed Brent crude above $100 per barrel, its highest level in two months. This surge is expected to elevate inflation expectations and tighten financing conditions due to higher interest rates. The 10-year U.S. Treasury yield rose by 10 basis points this week to 4.66%, reaching a new high since Trump's second term began.

Despite Alphabet's strong cloud business growth, the company's stock price plummeted by 8% after increasing its capital expenditure guidance for 2026. Tesla also saw a nearly 20% drop in its share price due to concerns over profit margins and AI product rollout pace.