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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