Oil Prices Soar 5% as US-Iran Talks Stall and Semiconductor Stocks Tumble

Negotiations between the US and Iran have stalled over the Strait of Hormuz issue, sending oil prices surging 5% on Monday. The renewed concern about Middle Eastern crude supplies has reignited inflation worries and Federal Reserve rate-hike jitters, pushing all four major US stock indices lower in choppy trading.

The Philadelphia Semiconductor Index led the decline, tumbling nearly 3%, after Intel announced a massive capital-raising plan. TSMC's ADR followed with a 0.37% drop, as investors grew concerned about the equity dilution and capital demands for AI infrastructure buildouts.

US West Texas Intermediate (WTI) crude futures surged about 5.1% to settle at $82.13 per barrel, while Brent crude futures jumped roughly 5% to close at $87.72 per barrel. The US Strategic Petroleum Reserve has fallen below 300 million barrels, hitting its lowest level since January 1983.

Cleveland Federal Reserve President Beth Hammack stated that the Fed may need to implement multiple rate hikes to bring inflation back to its target. Market participants hold divergent views on the outlook, with some analysts expressing concern about the failure of the US and Iranian governments to initiate substantive negotiations.