SYDNEY: Share markets slid in Asia on Monday as fighting intensified in the Gulf and Iran claimed to have closed the vital Strait of Hormuz, sending oil prices surging and rekindling inflation risks globally.

The dollar rose with bond yields as investors narrowed the odds of a hike in interest rates from the Federal Reserve, just a day before Chair Kevin Warsh is due to face Congress for the first time in his new role.

Inflation figures for June on Tuesday could show some cooling in the headline rate of 4.2% as petrol prices decline, though some of that will reverse now that oil is rising anew.

Brent crude climbed 4.1% to reach $79.11 a barrel, up from the recent trough of $70.14, while US crude added 4.1% to $74.37 a barrel.

US officials said around 20 vessels had been escorted through the strait in the previous 24 hours, though ship tracking sites showed little traffic moving.

Equity investors will be hoping the earnings season proves as upbeat as forecast with the major banks kicking off from Tuesday, while Netflix and General Electric are also on the docket.

“Tech continues to screen highly in our models, supported by stand out earnings growth/momentum and attractive valuations,” wrote analysts at Citi in a note.

“While AI volatility may remain elevated over the coming quarter, we maintain our Overweight stance on global IT and the US,” they added. “We pair these growth exposures with over weights in cyclical regions/sectors, including Japan, financials and materials.”

S&P 500 futures eased 0.4%, while Nasdaq futures lost 0.9%. In Europe, EUROSTOXX 50 futures and DAX futures both fell 0.6%, while FTSE futures dipped 0.1%.

Japan’s Nikkei fell 1.6%, having shed 1.7% last week, while MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.9%.

Testing the chip bubble

South Korea’s formerly red-hot market shed 5.4%, and will be in focus having lost almost 8% last week as leveraged bets on semiconductor shares came under pressure.