Gulf war hits week four: oil spikes, chips falter, ai boom stalls

The Persian Gulf conflict just passed its twenty-first day and every metric that mattered last month is now a relic. Brent crude punched past $110 at Monday’s open, European natural gas jumped 5 % to €62 per MWh, and equities bled from Madrid to Milan while investors dumped even their sacred metals to raise cash.

Markets discover there is no safe asset, only expensive liquidity

The Ibex 35 dropped 2.2 % to 16,300 points, tracking losses in the DAX (-2 %), CAC 40 (-1.5 %) and FTSE MIB (-1.8 %). Gold and silver slid alongside bonds as traders met margin calls. The euro held steady at 1.15 to the dollar, but only because the greenback itself is acting as the last crowded lifeboat.

Washington’s 48-hour ultimatum for Tehran to reopen the Strait of Hormuz—set to expire tonight—met an immediate counter-threat to seal the chokepoint and strike Gulf energy infrastructure. Each rhetorical volley widened the bid-ask spread on every European future.

Reality check: recession risk now rivals energy shock

The ECB admitted what price charts already screamed. It lifted its 2024 inflation forecast to 2.6 % while slicing expected euro-zone growth to 0.9 % next year. Chips, data centres and steel are caught in the same dragnet. Infineon fell 4 % on fears of supply-chain whiplash, ACS and Merlin Properties—Spain’s data-hall builders—lost 3.5 %, and ArcelorMittal shed 3 % as power costs outrun steel demand.

Banks are not immune. Deutsche Bank slipped 2.8 %, ING dropped 3.5 %, and even defence play Rheinmetall gave back 3 % after its recent run. The ai capex story that fuelled this year’s rally is being rewritten in real time: if electricity prices stay tripled, training the next large language model becomes a luxury Europe can’t afford.

Week three was the moment investors priced in escalation. Week four is when they price in contraction. The Strait of Hormuz is still open, but the global growth corridor is already half shut.