(Updates prices)

* Oil surges more than 5%, sending global bond prices

tumbling

* Samsung slides for a second session amid earnings worries

* Dollar steady ahead of Fed minutes due later in the day

By Amanda Cooper and Tom Westbrook

LONDON, July 8 (Reuters) - Oil prices surged more than 5% on

Wednesday while global stocks and bond prices tumbled as

investors fled risk assets after U.S. President Donald Trump

said the memorandum of understanding signed with Iran to end the

Gulf conflict was "over".

Trump, who was speaking in Ankara where he was attending a

NATO summit, added that he did not want to engage with Tehran.

"As far as I'm concerned, it's just a waste of time dealing

with them," he said.

Market sentiment was already fragile after U.S. and Iranian

forces had traded attacks in the Gulf.

Brent crude futures leapt 5%, the most in a day

since late May, to $78 a barrel.

While that was well shy of the peaks above $120 seen at the

height of the conflict, it was enough to inject some fresh

inflation risk into the bond market, particularly since months

of conflict have drawn down global oil inventories.

"It's clearly not what the market's wanted and it really

weighs heavily on sentiment," Chris Beauchamp, chief market

strategist at IG, said.

Benchmark 10-year U.S. Treasury note yields rose for a

seventh day to a one-month high of 4.58%, while in Europe,

yields on German and Italian 10-year

bonds rose by the most in a month to also hit one-month highs at

3.075% and 3.9%, respectively.

Data this week showed crude stocks in the U.S. Strategic

Petroleum Reserve hit their lowest level since 1983, leaving

markets more vulnerable to future supply shocks.

"The main thing is really whether or not the Strait of

Hormuz remains open and we still see traffic (and) whether or

not oil can continue to flow," Khoon Goh, head of Asia research

at ANZ in Singapore, said.

STOCKS DROP

European shares dropped 1.6%, on track for the biggest

one-day drop in the STOXX 600 since mid-March, while

U.S. futures fell 0.9% to 1.3%.

The VIX volatility index jumped nearly 13% in its

largest one-day rise in over a month, although it was still

below the highs in March.

The stock market has already been under some pressure in

recent weeks, as investors are increasingly questioning the

valuations of some of this year's top-performing semiconductor

and AI-linked stocks.

Samsung Electronics ( SSNLF ) shares slid for a second

straight session on Wednesday, despite the company flagging a

19-fold rise in profit. Analysts and investors are concerned

that memory chip demand may slow in the second half of the year.

Over the last couple of weeks, there has been a distinct

shift out of chip stocks and into other parts of the market,

including financials, consumer stocks and back to the so-called

hyperscalers that have dominated market action over the past

year or so.

Samsung's results highlighted how investors are increasingly

questioning valuations as bottlenecks in some parts of the AI

supply chain - such as memory chips or data centres - start to

clear, and pricing for AI models becomes harder to predict.

"What you could see is the market looking for exactly what

the pricing power will be, and that can mean that there are

fluctuations in valuations," said ING chief economist and global

head of research Marieke Blom.

"What we also see is capex spending is - relative to EBITDA

- increasing, which means that the amount of support that can be

given via share buybacks and so forth is coming down. So we may

see pressure on valuations in some parts of the AI chain."

In currency markets, the dollar rose, pushing the euro

to just above $1.14, while the yen hovered around 162.5

, not far from 40-year lows.

Minutes from last month's Federal Reserve meeting are due

later on Wednesday, and traders reckon new Chair Kevin Warsh

might pare back the detail to dampen any policy signal.