News that Iran and Israel had traded fire sparked worries about an escalation of the Middle East crisis, adding to the gloomy mood on trading floors and sending oil prices surging more than three percent.

The technology sector bore the brunt of losses on Monday as investors cashed out following a breathtaking surge in recent months powered by a race into all things linked to artificial intelligence.

The selling came after a closely watched report on Friday showed more than double the amount of US jobs than expected were created in May, while those in the previous two months were revised higher.

Analysts said that showed the world's top economy remained resilient in the face of surging prices, but ramped up bets on the Fed raising interest rates.

Yields on US Treasury bonds rose as investors anticipated higher rates, while the dollar strengthened against its main rivals.

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All three main indexes on Wall Street tumbled on Friday, led by a 4 percent drop in the Nasdaq.

That heavy selling extended into Asia, where tech-rich markets felt the most pain.

Seoul – which has hit multiple record highs this year – tanked 8.3 percent as chipmaker Samsung shed more than 10 percent and rival SK hynix lost 7.7 percent.

Taipei and Tokyo each dived more than 3 percent, while there were also hefty losses in Hong Kong, Shanghai, Singapore, Manila, Mumbai, Jakarta, Wellington and Bangkok.

'Disappointing guidance'

Bitcoin was hovering around $63,000 after sinking below $60,000 on Friday to its lowest level since October 2024, just before the election of Donald Trump to the US presidency propelled it to a record high.

"Stronger-than-expected labor market data reignited concerns that the Federal Reserve may be preparing to embark on a new tightening cycle," said SPI Asset Management's Stephen Innes.

He added that "fading hopes for progress in Middle East peace negotiations kept energy markets on edge, and a handful of disappointing guidance updates from major technology companies interrupted what had become an increasingly one-way artificial intelligence trade".

Investors were already concerned about extended valuations in the AI realm, which has been the main catalyst for a global market surge in the past two years, eclipsing worries about the Middle East crisis.

US chipmaker Broadcom's below-forecast revenue outlook for the third quarter added to those concerns.

Fears about a re-escalation of the Iran war pushed crude prices sharply higher after Israeli said on Monday it had struck targets in western and central Iran, as Iranian state TV reported explosions in the cities of Tehran, Tabriz and Isfahan.

The attacks came a day after Israel said its military intercepted incoming Iranian missiles, the first such barrage since an April ceasefire took hold.

Tehran called the attack a "warning" after strikes on Beirut's southern suburbs. Israel's strikes came hours after Trump called on it to refrain from retaliating.

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