Asian stock markets plunged on Monday amid a sharp tech sell-off and renewed military strikes between Iran and Israel. South Korea’s Kospi index dropped nearly 9% within minutes of opening, triggering a 20-minute circuit breaker halt — the third such event this year. The index closed down 8.3%, its worst day since early 2020, led by steep losses in major tech firms like Samsung and SK Hynix. Japan’s Nikkei fell 3.8%, while Taiwan’s TSMC dropped 3%, dragging down other chip-heavy indices.

The sell-off followed a period of strong gains in tech stocks, fueled by investor enthusiasm for artificial intelligence. However, analysts say markets are now demanding clearer evidence that AI investments are translating into real revenue. Investor sentiment was further shaken by geopolitical risks after Iran and Israel exchanged missile strikes over the weekend, breaking a fragile ceasefire. Iran warned of a week of retaliatory attacks, while Israel responded despite U.S. diplomatic efforts to de-escalate.

Oil prices surged, with Brent crude rising over 4% to $97.34 a barrel, as traders feared disruptions to Gulf energy flows. The Strait of Hormuz, a critical oil transit route, remains under threat. Analysts warn that without diplomatic progress, energy and equity markets could face continued volatility. U.S. President Donald Trump said he was close to a final deal with Iran but expressed concern that recent attacks could derail negotiations.