Oil prices rose sharply on Monday amid fresh concerns over supply from the Middle East. Both main crude contracts climbed more than three per cent after Saudi Arabia shut a key pipeline following drone attacks, while a vessel was struck in the Strait of Hormuz.

The increase added to existing pressure on global inflation and came ahead of an expected interest rate decision by the US Federal Reserve later in the week. Average diesel prices in the United States had already topped $6 a gallon, affecting transport and agriculture costs.

At the same time, technology stocks faced selling pressure. The downturn followed comments from leaders of major artificial intelligence companies calling for a slowdown in the pace of AI development due to potential risks, including the possibility of systems improving themselves beyond human control.

Shares in Japanese tech investment firm SoftBank fell more than 10 per cent, while other chipmakers and related companies in Asia also declined. Broader markets in Seoul, Tokyo and Shanghai closed lower, though some exchanges such as Hong Kong recorded gains.

Analysts noted that high oil prices are adding to inflation worries, while elevated bond yields make future tech profits less attractive to investors. The combination of energy supply fears and caution around AI valuations contributed to the mixed trading session across global markets.

Photo credit: Punch Newspaper