Stock Markets Hit Records Amid AI Boom and Iran Ceasefire Concerns

Stock markets in Japan and South Korea reached new highs on Monday, driven by enthusiasm surrounding the artificial intelligence (AI) industry. Investors are closely monitoring developments in the Iran ceasefire negotiations. Oil prices increased by over 2% as discussions between the U.S. and Iran continued, focusing on reopening the Strait of Hormuz, a crucial route for global oil and gas transport. U.S. futures showed slight gains.

Asian markets generally saw upward trends. Japan’s and South Korea’s indexes hit record levels during trading, largely due to a surge in technology stocks. The Nikkei 225 in Tokyo rose more than 1.3%, surpassing 67,000 points for the first time, reaching 67,231.28. Shares of SoftBank Group, which invests heavily in AI, climbed over 9% after setting records last week. South Korea’s Kospi index soared nearly 5%, reaching an all-time high of 8,874.16, with Samsung Electronics rising more than 9%.

Official figures indicated that South Korea’s May exports increased by 53% year-on-year, largely driven by the global demand for semiconductors. The Nikkei 225 rose over 12% in the past month, while the Kospi surged more than 27% during the same period. Hong Kong’s Hang Seng index gained 0.9% to 25,408.96. Conversely, the Shanghai Composite index fell 0.1% to 4,063.72 after China reported a slowdown in factory activity and diminished new export demand in May.

Australia’s S&P/ASX 200 decreased by 0.1% to 8,720.30. Taiwan’s Taiex increased by 1.4%, while India’s Sensex rose by 0.6%.

Three months after the onset of the Iran conflict, uncertainties persist about a permanent resolution. These uncertainties continue to influence market behavior and oil price volatility, even as AI demand and strong corporate earnings drive a stock market rally, including in the U.S. On Friday, U.S. President Donald Trump engaged in high-level talks but had not reached a decision regarding a provisional plan to extend the Iran ceasefire by 60 days. Iran reported no final deal. The reopening of the Strait of Hormuz remains uncertain, as it has largely stayed closed due to a U.S. sea blockade on Iranian ports.

Early on Monday, Brent crude oil climbed 2.4% to $93.33 per barrel. It had been roughly $70 a barrel in February before the conflict. U.S. crude similarly rose 2.8% to $89.76 a barrel.

On Friday, U.S. stock markets achieved more records, driven by major technology stocks. The S&P 500 index gained 0.2%, marking its seventh consecutive rise to reach 7,580.06. The Dow Jones Industrial Average increased by 0.7% to 51,032.46, while the tech-dominated Nasdaq composite added 0.2% to 26,972.62. Dell Technologies surged 32.8% following reports of better-than-expected results and upwardly revised outlooks due to strong AI-related demand. Microsoft saw a 5.4% increase, while Broadcom went up 4.7%.

Additionally, the U.S. dollar rose against the Japanese yen, trading at 159.48 yen compared to 159.25 yen. The euro experienced a slight decrease, trading at $1.1645 from $1.1667.