Oil Stages Sharp V-Shaped Reversal as AI Earnings Disappoint, Dragging Chip Stocks Lower

Market Overview

Renewed uncertainty surrounding a potential U.S.–Iran agreement, coupled with rising concerns over the AI semiconductor supply chain, weighed on U.S. equities, snapping a two-day winning streak. All three major indices retreated, with both the S&P 500 and Nasdaq pulling back from record highs. Semiconductor stocks bore the brunt of the sell-off.

On the macro front, reports that the U.S. plans to reopen shipping lanes through the Strait of Hormuz this week, alongside an attack on an Iranian port, triggered heightened volatility across commodities and FX markets. Capital flows rapidly rotated between safe-haven demand and inflation expectations.

Sector Breakdown■ Semiconductors & Technology

The semiconductor index dropped nearly 3%, leading losses across the broader market.

• Arm Holdings posted strong earnings; however, persistent concerns over AI chip supply constraints drove shares down 10%.

• CoreWeave fell more than 10% in after-hours trading following weaker-than-expected Q2 guidance.

• SanDisk declined करीब 5%, while AMD slipped over 3%.

• Intel bucked the trend, rising nearly 2% and marking its second consecutive gain.

■ Energy & Precious Metals

Crude oil staged a dramatic intraday “V-shaped” reversal. Prices initially plunged over 5% before rebounding sharply, ultimately climbing more than 3% to hit session highs, driven by developments surrounding the Strait of Hormuz and port attacks.

• Gold and silver extended gains for a third straight session.

• Silver surged nearly 7% intraday.

• Gold rose close to 2%, touching a two-week high.

• Copper (COMEX) ended its rally, pulling back from record-high levels.

■ Fixed Income & FX

U.S. Treasury yields rebounded from session lows, tracking the recovery in oil prices.

• The U.S. Dollar Index (DXY) reversed higher following news of potential shipping normalization in the Strait of Hormuz, moving off a more than two-month low.

• The offshore yuan (CNH) strengthened significantly, breaking below the 6.80 level and reaching a four-year high.

■ Cryptocurrencies

Amid rising risk aversion and a stronger dollar, Bitcoin fell below the $80,000 mark intraday, retreating more than 2% from its daily high.

Key Themes Ahead● Escalating Tensions in the Strait of Hormuz

Geopolitical tensions intensified after Irans military claimed that U.S. forces, in coordination with regional allies, launched airstrikes on civilian coastal areas and targeted oil tankers heading toward the Strait of Hormuz.

The U.S. stated that it conducted precision strikes on Iranian military facilities linked to attacks on American forces. Iranian media reported explosions near Bandar Abbas, with port infrastructure on Qeshm Island also targeted. Irans air defense systems reportedly intercepted two “hostile aircraft.”

Conflicting narratives have emerged:

• Iranian officials suggested the attack may have been retaliation by the UAE.

• Israeli sources denied involvement.

• Iranian military sources claimed missile strikes on hostile units within the strait.

• Reports indicated three U.S. Navy destroyers were attacked near the region.

Meanwhile, U.S. media reported ongoing negotiations between Washington and Tehran regarding a temporary 30-day ceasefire and the reopening of the Strait, alongside discussions on a broader long-term framework. Irans Foreign Ministry stated it has not yet responded to the U.S. proposal.

● PBoC Extends Gold Buying Streak to 18 Months

Chinas foreign exchange reserves rose to $3.4105 trillion as of end-April 2026, up $68.4 billion (+2.05%) from March.

• Gold reserves increased to 74.64 million ounces, up 260,000 ounces month-over-month.

• This marks the 18th consecutive month of gold accumulation since November 2022.

• For reference:

• March reserves: 74.38 million ounces (+160,000 oz MoM)

• February reserves: 74.22 million ounces

Key Data to Watch (GMT+8)

20:30 (ET)

• U.S. April Unemployment Rate

• U.S. Nonfarm Payrolls (April)

• U.S. Average Hourly Earnings (YoY & MoM)

22:00 (ET)

• U.S. 1-Year Inflation Expectations (May, preliminary)

• University of Michigan Consumer Sentiment Index (May, preliminary)

• U.S. Wholesale Sales (March, MoM)