To The Moon

Oil prices surged, sparking panic in AI markets! Following Iran's announcement of complete control over the Strait of Hormuz, where more than ten oil tankers were hit by artillery, international oil prices extended their gains. Overnight, international crude prices surged over 4.5%. Today (March 4), prices continued to climb, with WTI crude futures up 2.86% to $76.69 per barrel and Brent crude futures up 3.07% to $84.90 per barrel as of 16:00. Since the start of the week, both WTI and Brent crude have gained over 14%. Currently, as optimism about the artificial intelligence boom is being replaced by concerns over oil-driven inflation shocks, global capital is fleeing the hottest AI trades. Today, Samsung Electronics plummeted over 11%, SK Hynix fell more than 9%, SoftBank Group dropped over 7%, while KIOXIA and Advantest declined nearly 5%. The latest development in the Middle East situation came from a Xinhua News Agency report stating that Iran's Islamic Revolutionary Guard Corps said on the 4th that Iran launched over 40 more missiles at U.S. and Israeli targets. Iran's Fars News Agency quoted the Revolutionary Guard, saying its aerospace force initiated the 17th wave of the "True Promise-4" offensive against the U.S. and Israel "hours ago," firing over 40 missiles at multiple targets. Oil supply fears intensified, and AI concept stocks plunged. As the situation with Iran deteriorated, long positions in artificial intelligence and other popular assets were aggressively sold off in a wave of cross-market risk reduction. Attacks by the U.S. and Israel on Iran have destabilized the Middle East, causing the "world's oil chokepoint," the Strait of Hormuz, to come to a standstill, leading to a recent sustained surge in oil prices. Market analysts point out that this could exacerbate U.S. inflation and cast doubt on whether the Federal Reserve will resume interest rate cuts. Furthermore, it remains unclear when and how the attacks will end, increasing the risk of a prolonged conflict and unforeseen consequences beyond the White House's control. As market worries about oil-driven inflation shocks intensify, capital is exiting AI trades. This week, overseas investors sold approximately $3.1 billion worth of South Korean stocks. Memory chip giants Samsung Electronics and SK Hynix both fell nearly 20%. Samsung, in particular, is facing its worst two-day plunge in nearly fifty years. Matthew Haupt, portfolio manager at Sydney's Wilson Asset Management, stated, "As the Iran situation worsens, long positions in AI and other hot assets are being actively sold in a scramble to reduce cross-market risk exposure." He added that the sell-off is hitting AI-related stocks hard because doubts persist about whether the sector's massive capital expenditure plans will ultimately generate sufficient profits. This week's pullback has given fresh momentum to long-time skeptics who have warned that the frenzied rally around artificial intelligence has become detached from reality. Now, these concerns are colliding with a major geopolitical shock, forcing investors to reassess risks, plan for the inflationary threat posed by high oil prices, and consider how these pressures will ripple through global markets. As the world's best-performing market this year, South Korea's benchmark Kospi index plunged over 12% at one point during Wednesday's trading session, marking its worst trading day on record. Caution also spread to the currency market, with the South Korean won falling 3.3% against the U.S. dollar at Tuesday's close, its largest single-day decline based on closing prices since 2009. Morgan Stanley indicated that as conflict in the Middle East puts previously strong Asian growth stocks at risk, stock markets in Japan, South Korea, and other parts of Asia could be "hard hit." In a report, Morgan Stanley's chief Asia equity strategist, Jonathan Garner, wrote that given Asian equities' strong returns since the start of the year and significant outperformance versus U.S. stocks, he expects Asian markets to see a "significant pullback" on both an absolute and relative basis. Although value characteristics might help support the performance of Japanese and South Korean markets, both are major energy importers. Considering the strong gains over the past 12 months, some profit-taking is expected as part of a broader de-risking and position reduction process. Trump's "Escort" Remarks Draw Skepticism According to a Xinhua report, on the 3rd local time, U.S. President Donald Trump stated that the U.S. Navy would begin escorting oil tankers through the Strait of Hormuz if necessary. However, these remarks drew skepticism from industry insiders, who believe the U.S. military currently lacks the capacity to undertake this task. Trump also said he had directed the U.S. International Development Finance Corporation to provide political risk insurance and guarantees for maritime trade in the Gulf region, especially energy trade, at "very reasonable prices." A shipping industry insider who asked not to be named told Reuters that the U.S. has a limited number of warships available for escort duties. It was reported that as of the 2nd, the U.S. Navy could deploy up to 12 ships stationed in the Middle East for escort operations, but some are already involved in military actions against Iran. Additionally, the escort mission itself carries risks, as warships might need to respond to military actions from Iran. Rohit Latod, senior analyst at UK-based consultancy Vortexa, said the measures Trump intends to take are unlikely to ensure widespread and safe passage, and only a portion of vessels are expected to transit the Strait of Hormuz. The Strait of Hormuz is a global strategic choke point, with about one-fifth of the world's crude oil shipments passing through it. As one of the top three global liquefied natural gas exporters, Qatar ships almost all its LNG through the Strait, accounting for about 20% of global supply. Following military strikes by the U.S. and Israel, multiple tankers were damaged by attacks, and a large number of vessels were stranded. Shipping companies and insurers have begun reassessing regional risks, leading to increased premiums or reduced coverage. This has raised tanker transportation costs, causing some operators to delay voyages or seek alternative routes.