Japan and South Korea Stocks Hit Records on AI Boom as Iran Tensions Lift Oil

On Monday, SoftBank Group shares rose 14% in Tokyo, and by the close the investment company, which leans heavily on artificial intelligence, had overtaken Toyota as Japan's most valuable listed company. It was the sharpest move on a day when stock markets in Japan and South Korea both closed at records, even as the U.S. and Iran traded fresh blows and oil climbed.

The Nikkei 225 finished 0.9% higher at 66,934.33, an all-time closing high. During the session it crossed 67,000 for the first time, peaking at 67,231.28. In South Korea the Kospi jumped 3.7% to close at 8,788.38, also a record, after touching an intraday high of 8,874.16. Samsung Electronics, the country's largest company, gained 10.1%. Official data released the same day showed South Korean exports up 53% from a year earlier in May, helped by worldwide demand for semiconductors. Over the past month the Nikkei has risen more than 12%, and the Kospi about 27%.

Elsewhere in Asia the picture was mixed. Hong Kong's Hang Seng traded 0.8% higher at 25,389.54, and Taiwan's Taiex climbed 1.4%. The Shanghai Composite slipped 0.3% to 4,057.74 after China reported over the weekend that May factory activity had softened, with signs of weaker new export demand. Australia's S&P/ASX 200 edged down less than 0.1% to 8,729.40, and India's Sensex lost 0.2%. U.S. futures edged higher.

The geopolitical backdrop was less settled. Oil rose more than 3% as U.S.-Iran negotiations continued, including talks on reopening the Strait of Hormuz, a key route for global oil and natural gas shipments. The strait has been largely closed, and the U.S. has imposed a sea blockade on Iranian ports. The U.S. military said Monday that it bombed Iranian military sites after Tehran shot down an American drone. Brent crude, the international benchmark, rose 3.1% early in the day to $93.95 a barrel, compared with roughly $70 in late February, before the war began. Benchmark U.S. crude gained 3.5% to $90.39.

The war is now three months old, and uncertainty over a lasting end to it keeps moving markets and swinging oil prices. On Friday, President Donald Trump met with advisers in high-level talks but had not decided on a tentative plan to extend the ceasefire by 60 days, while Iran said a deal had not been finalized. Meanwhile the Israeli army was advancing in Lebanon in its campaign against the Iran-backed Hezbollah, which further complicates the path to an agreement.

Still, investors appear to be looking past the fighting. Jonas Goltermann, chief markets economist at Capital Economics, wrote that despite another round of tit-for-tat attacks, market participants are operating on the assumption that the Strait of Hormuz will reopen sooner rather than later.

Wall Street set the tone on Friday, with stocks hitting more records on the strength of big technology names. The S&P 500 rose 0.2% to 7,580.06, its seventh straight gain. The Dow Jones Industrial Average added 0.7% to 51,032.46, and the Nasdaq composite gained 0.2% to 26,972.62. Dell Technologies surged 32.8% after stronger-than-expected results and a raised outlook on AI-related demand; Microsoft rose more than 5.4% and Broadcom 4.7%. In currency trading, the dollar rose to 159.46 yen from 159.25, while the euro slipped to $1.1657 from $1.1667.

What to watch now is whether the ceasefire is extended by 60 days and whether the Strait of Hormuz reopens. Both remain unresolved, and the oil market is reacting to each development.