* South Korea stocks slip, Wall St futures steady

* Brent tops $90 as US launches strikes, Iran retaliates

* Alphabet, Intel ( INTC ) and Tesla among earnings this week

* Yields rise as markets narrow odds on Fed September hike

(Adds analyst quote, Burnham)

By Wayne Cole

SYDNEY, July 20 (Reuters) - Asian share markets slipped on

Monday as the escalating conflict in the Gulf lifted oil prices

and fanned fears of inflation, while a packed week of major tech

earnings will further test investor faith in the AI trade.

Brent crude climbed above $90 a barrel for the first time in

more than a month as the U.S. military started a ninth straight

day of attacks against Iran, which in turn struck targets across

the region. Just a handful of ships transited the Strait of

Hormuz on Sunday and one was reported to be on fire.

"The longer the Strait remains closed and the war escalates

the greater the risk that oil prices will have to rise to around

$150/barrel to bring demand down to match the hit to supply,"

said Shane Oliver, head of investment strategy at fund manager

AMP. "This is not our base case but it's a high risk again."

Brent duly added 2.6% to $90.40 a barrel, while U.S.

crude rose 2.3% to $84.39.

The jump in fuel costs has revived worries about inflation

even as U.S. consumer price data surprised on the downside last

week, leading futures markets to price in 29 basis points of

Federal Reserve rate hikes by year-end.

"Our forecast is for a more gradual turn toward a Fed hike

in 2027, but the balance of risks is shifting in the direction

of an earlier hike than expected," said Bruce Kasman, chief

economist at JPMorgan, noting a recent hawkish tilt in Fed

policy rhetoric.

Futures imply a 60% chance of a rate rise as early as

September, pushing yields on 30-year Treasuries back

above the psychological 5.0% barrier. This is a level that tends

to attract funds away from equities and toward fixed income,

while lifting the valuation bar for future corporate earnings.

The shift has come just as investors question sky-high

valuations for chip and AI stocks, which have seen the

Philadelphia Semiconductor Index shed 10% last week to leave it

20% down from June's record high.

LOFTY EXPECTATIONS FOR EARNINGS

Markets took an added blow on Friday when Chinese AI firm

Moonshot said it had a new open weight model, Kimi K3, that it

says delivers performance approaching U.S. giant Anthropic's

frontier Fable model.

All of which raises the stakes for this week's rush of

profit results, which include Alphabet, Intel ( INTC )

and Tesla.

BofA analyst Savita Subramanian remains upbeat on the

earnings outlook, tipping a 5% beat versus consensus, or 28%

growth. Tech is expected to drive over half of growth, with

semiconductors expected to rise around 130% year-on-year.

Such forecasts helped S&P 500 futures hold steady,

while Nasdaq futures edged up 0.1%. In Europe, EUROSTOXX

50 futures were little changed, while DAX futures

and FTSE futures eased 0.1%.

Japan's Nikkei was closed for a holiday, having shed

6.4% last week in a tech-led rout. MSCI's broadest index of

Asia-Pacific shares outside Japan dipped 0.3%,

while Chinese blue chips rose 1.4%.

South Korea's chip-heavy market lost a further 4.2%,

after diving almost 9% last week in wild trade as retail

investors were squeezed out of leveraged positions.

The latest spike in oil will be a headache for the European

Central Bank which meets on Thursday and is considered likely to

hold rates at 2.25% following June's hike.

Attention will be on policy makers' guidance with markets

almost fully priced for a rise at its September meeting and

rates of 2.75% early next year.

The euro was flat at $1.1433, having spent more

than a week trading between $1.1377 and $1.1482. The dollar was

steady at 162.39 yen, just below the recent 40-year

peak of 162.84 as Japanese authorities flag the threat of

intervention should the yen weaken quickly.

Sterling held at $1.3449 as bond markets waited for

Britain's incoming Prime Minister Andy Burnham to name a new

treasurer.

In commodity markets, the rise in yields pressured

non-interest-paying gold which fell 0.5% to $3,998 an ounce

.