Oil prices jumped Tuesday to their highest level since late last week after reports that two tankers transiting the Strait of Hormuz had been hit by unknown projectiles.
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U.S. crude oil rose more than 3% to above $70 per barrel for the first time since July 1. International Brent crude oil also rose 3% to more than $74 per barrel.
Earlier on Tuesday, the U.K.’s Maritime Trade Operations center said it had received two reports of attacks on ships “transiting the Strait of Hormuz.” One of them was “struck by an unknown Uncrewed Aerial Vehicle,” the agency said, and a second vessel was “struck by an unidentified projectile and is believed to have structural damage.”
An attack on a third ship off the coast of Oman Tuesday caused a fire to break out on board, said UKMTO.
A U.S. official confirmed the UKMTO reports, telling NBC News that Iran’s Islamic Revolutionary Guard Corps had fired missiles at two ships Tuesday and struck a third commercial vessel with at least one drone.
The U.S. military also shot down additional drones that had been fired by Iran, the official said.
Adding to worries for oil traders on Tuesday was a report from Reuters that one of the ships, which it identified as a liquefied natural gas tanker, the Al Rekayyat, was “at risk of exploding due to a fire in its engine room.” NBC News has not been able to verify that report.
U.S. Treasury yields rose along with oil prices, with the 20- and 30-year yields breaking above 5%. The 10-year U.S. government bond yield, which more heavily influences consumer borrowing rates than others, rose to its highest level since early June.
Stocks briefly fell on news of the attacks, with the S&P 500 falling as much as nearly 1%. The index later rebounded and was down only 0.3% in early afternoon trading.
The Nasdaq 100 index fell harder, however, dropping as much as 2%. Most of these losses were attributable to heavy selling in chip stocks and tech companies after shares of Samsung plunged 7% overnight.
Chip stocks tumble
One of the world’s largest chip and memory manufacturers, Samsung reported better-than-expected earnings early Tuesday. But investors noted that the earnings beat wasn’t as large as some had expected, triggering a sell-off in the company’s shares.
Samsung “stock crumbled in a wave of profit taking, sending shockwaves through the U.S. market a day after participants appeared to re-embrace volatile chip names,” wrote Joe Mazzola, Charles Schwab’s head trading & derivatives strategist in a note Tuesday.
Jim Reid at Deutsche Bank pointed out that Samsung’s “results were ‘only’ 6% ahead of estimates.”
But Samsung is only the latest major tech company in recent months to see its stock fall sharply despite reporting strong earnings. Investors remain cautious and easily spooked by any signs that the euphoria carrying AI stocks could be slowing down.
Overnight, South Korea’s Kospi Index briefly slipped into bear market territory as other major chip stocks which trade on the exchange, such as SK Hynix, also fell sharply. An index enters a bear market if it falls more than 20% from its most recent all-time high.
Adding to the pressure on chip stocks Tuesday was a report from Reuters that China’s AI startup DeepSeek is developing its own AI chip. Over time, this could reduce the company’s reliance on chips from American suppliers.
As of 1 p.m. ET, nine of the 10 poorest performing Nasdaq stocks were all either memory or chip stocks. The worst performers were Intel and Sandisk, both of which were down about 9%.
Meanwhile, SpaceX shares slid 5% despite making its debut Tuesday as part of the prestigious Nasdaq 100 Index.
The Nasdaq 100 is a basket of the largest non-financial companies traded on the Nasdaq exchange.
Typically, a stock’s entry into a key index like the Nasdaq 100 triggers billions of dollars worth of buying, as funds that follow that particular index update their holdings to include shares of the newest entrant.
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