Global stock markets fall as oil prices rise after Middle East strikes

Global stock markets fell on Monday after a sharp decline in U.S. technology shares at the end of last week. Markets in Asia and Europe dropped as investors questioned how companies leading artificial intelligence development would finance large spending plans.

Oil prices rose at the same time. Brent crude, the international benchmark, climbed nearly 5 percent to $97.60 a barrel after Iran and Israel exchanged strikes.

In Asia, markets fell sharply.

The South Korean Kospi index dropped nearly 9 percent at one point, leading to a brief trading halt. Shares of Samsung Electronics and SK Hynix each declined about 9 percent and 6 percent. Japan’s Nikkei 225 index fell 3 percent. Hong Kong’s Hang Seng index dropped 1.5 percent.

In London, the FTSE 100 opened 0.4 percent lower, with shares of Rolls-Royce and IAG among the largest decliners. European chip-related companies also declined. Shares of BE Semiconductor Industries fell 4.5 percent and ASML dropped 3.2 percent. Aixtron declined nearly 6 percent and Nokia fell 5 percent.

Oil prices and regional tensions Brent crude had traded as low as $93 a barrel last week. The increase followed the first direct strikes between Iran and Israel since a ceasefire in April. Analysts noted concerns that further clashes could affect shipping through the Strait of Hormuz.

U.S. markets were expected to open lower later on Monday. The tech-heavy Nasdaq index lost nearly 5 percent last week, while the S&P 500 fell 2 percent over the same period. Susannah Streeter of Wealth Club said markets were pricing in a greater chance of a Federal Reserve interest rate increase this year.