(The opinions expressed here are those of the author.)

By Anna Szymanski

July 8 (Reuters) -

What matters in U.S. and global markets today

By Anna Szymanski, Editor-in-Charge, Reuters Open Interest

Oil prices jumped on Wednesday after the U.S. and Iran exchanged

fresh military strikes, the most significant escalation since

the two sides agreed to a ceasefire last month. President Donald

Trump also said that their memorandum of understanding was

"over".

U.S. strikes against Iranian targets on Tuesday came after

several oil tankers were hit by projectiles in the Strait of

Hormuz in recent days. Washington's move prompted Iranian

attacks on U.S. bases in the region.

Meanwhile, global stock markets looked shaky as chip shares

continued to sell off on Wednesday, dragging on major indexes in

Asia. South Korea's chip-heavy KOSPI index has now slipped into

bear market territory, falling 20% from a record close in late

June. Of course, it's still up more than 70% this year.

I'll get into that and more below.

But first, check out Mike Dolan's mid-week column, where he

muses on issues including Russia's Achilles' heel in its war

with Ukraine.

And listen to the latest episode of the Morning Bid daily

podcast. Subscribe to hear Reuters journalists discuss the

biggest news in markets and finance seven days a week.

IS IT 'OVER'?

Oil prices settled 3% higher on Tuesday after the fresh military

exchanges and a decision by Washington to revoke a sanctions

waiver on Iranian oil, effective July 17.

They jumped further early on Wednesday after Trump's remarks on

the MoU, with Brent crude trading at more than $78 per barrel.

Traders may be on edge, but they'll likely assume the flare-up

is simply a bump in the road, not a sustained restart of

hostilities, and that the U.S. president's statements are mostly

bravado.

On top of all this, a chip stock selloff continued on Tuesday,

with the SOX chip index slipping nearly 5% stateside and the

Nasdaq falling more than 1%. Elon Musk's SpaceX was caught up in

the selling, shedding nearly 7% on its first day as a

constituent of the Nasdaq 100 index.

Shares in South Korean chipmakers Samsung and SK Hynix closed

lower again on Wednesday, despite the former's eye-popping

results yesterday. Shares opened lower over in Europe and Wall

Street futures were down sharply before the bell.

Elsewhere, the kiwi dollar jumped after New Zealand's central

bank hiked rates there by a quarter-point to 2.5% to combat

inflation, with some further tightening "likely to be required".

That's a reminder, if any were needed, of the continued spectre

of price pressures globally. That will be all the more acute now

that fresh uncertainty looms over the improving energy supply

picture in the Middle East. Bond prices fell across the board on

Wednesday.

Also on the monetary policy front, today will see the release of

last month's Fed policy meeting minutes, which could throw more

light on the thinking of policymakers. They predate the rising

Hormuz transits in recent weeks, a reminder of the short shelf

life of any economic report.

Chart of the day

South Korea's benchmark KOSPI stock index ‌fell more than 5% on

Wednesday, dropping roughly 20% from a record close in late

June, signaling that it is in bear market territory despite its

massive gains this year.

Today's events to watch

* Release of minutes from Federal Reserve's June policy

meeting

* U.S. 10-year note auction (6 p.m. EDT)

* Second day of NATO summit in Ankara, Turkey

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