Capitalists saw their portfolios swell on Thursday as Asian shares surged, driven by continued investor confidence in artificial intelligence, while the price of Brent crude climbed above $98 a barrel amidst escalating conflict in Iran and the wider Middle East. This dual surge in tech profits and oil prices underscores the systemic extraction of wealth, with workers facing the brunt of inflationary pressures. The MSCI Asia-Pacific index ex-Japan rose about 1%, demonstrating a broad uplift for regional capital.
South Korea’s KOSPI jumped more than 3%, with AP reporting a 4.4% gain to 7,096.89. Japan’s Nikkei added about 0.7%, reaching 66,422.60. Hong Kong’s Hang Seng climbed 1.3% to 25,210.81, while the Shanghai Composite added 0.3% to 3,876.78. Australia’s S&P/ASX 200 gained 0.2% to 8,839.00, and Taiwan’s Taiex edged 0.1% higher, though India’s Sensex fell 0.6%.
Capital's AI Windfall
These gains reflect a deep confidence among investors that the artificial intelligence capital-expenditure cycle remains robust. Stronger cloud growth provides validation for the heavy spending on AI infrastructure, funneling profits directly to a select few. Charu Chanana, chief investment strategist at Saxo in Singapore, noted that "U.S. megacaps may face more scrutiny because they are writing the cheques, while chipmakers, memory suppliers and infrastructure companies get paid earlier in the investment cycle." This clarifies the flow of capital.
SK Hynix and Samsung Electronics led the KOSPI higher, with Samsung Electronics up 3.7% and memory chipmaker SK Hynix up 4.9%. In Tokyo, technology companies spearheaded gains, as SoftBank Group climbed 3.8%. Earnings reports from Alphabet and Tesla on Wall Street showed no sign of a slowdown in spending on AI infrastructure, confirming the continued investment. Google-parent Alphabet, in particular, sharply raised its capital expenditure plans for the year, ensuring further surplus extraction for its shareholders.
Imperial Ambition and Oil Prices
Oil prices served as a major driver of the session, directly linked to imperial maneuvering. Brent crude jumped 4% to nearly $98 a barrel, reaching $98.16, its highest level since early June. The U.S. benchmark crude gained 3.6% to $89.91 a barrel. This renewed surge followed the re-escalation of conflict in the Middle East between the United States and Iran, a clear projection of military power to secure resources.
Iran-aligned Houthis stated they had struck two Saudi oil tankers as part of a naval blockade on Saudi Arabia, threatening a second chokepoint on global oil supplies. This action, alongside Iran’s near-closure of the Strait of Hormuz, highlights the vulnerability of global energy flows. The U.S. military carried out a new round of strikes on Iran at President Donald Trump’s direction, marking a 12th successive night of American attacks. This imperial garrison action prompted further Iranian retaliation, with both sides increasingly targeting civilian infrastructure. Continued fighting prevents oil tankers from using the Strait of Hormuz, a narrow passage through which normally a fifth of all oil and natural gas traded passes.
Workers Bear the Inflationary Burden
The rise in oil prices pushed Germany’s 10-year bund yield above 3.2% for the first time since the euro zone debt crisis in 2011, sharpening focus on the European Central Bank meeting later in the day. Rising oil prices weigh on stocks because they raise costs for most businesses and can dent consumer spending, directly impacting the working class. Higher oil prices threaten a reacceleration of inflation, which could push the Federal Reserve and other central banks to raise interest rates. Such measures, while presented as economic management, primarily serve to suppress wages and consumer demand, further burdening workers.
Meanwhile, the U.S. dollar traded at 163.36 yen, with the Japanese currency wavering near its lowest level in 40 years. Expectations that the gap between U.S. and Japanese interest rates would widen due to higher inflation in the U.S. helped push the dollar higher against the yen. Japan’s BOJ-sensitive 2-year government bond yield hit a 31-year high in Tokyo on faster rate-hike bets. Japan’s finance minister issued verbal warnings about possible intervention, stating the government was ready to take decisive forex action as needed. Societe Generale FX strategist Kit Juckes observed, "The consensus view blames a timid BOJ (for the recent yen fall), but I think the problem is that higher oil prices have dashed hopes of 1.5% GDP growth this year," revealing the systemic impact of resource wars on national economies and the lives of ordinary people.