Trump Threatens Iran Amid Escalating Conflict and Tech Selloff
President Donald Trump has increased tensions between the US and Iran by threatening further military action. The conflict escalated after Houthi forces claimed they attacked two Saudi oil tankers in the Red Sea, disrupting traffic through the Strait of Hormuz.
The US is now considering a 'massive attack' on Iran, with Trump warning that both Iran and the Yemen-based Houthis would face military punishment if shipping in the Red Sea comes under further attack. This has led to a sharp reduction in shipping through the Strait of Hormuz, adding risks to global energy supplies.
Meanwhile, technology stocks have suffered steep losses after Alphabet increased its capital expenditure forecast to as much as $205 billion this year and Tesla reported weaker-than-expected profits. The selloff reflected growing concerns that massive investments required to build AI infrastructure may weigh on profitability before producing meaningful returns.
The escalating geopolitical tensions have also pushed gold prices lower, with spot gold dropping 1.9% to $4,049.74 per ounce as rising oil prices and Treasury yields dampened demand for the precious metal.