By Carmel Crimmins

May 28 (Reuters) - Life on the northwestern edge of Europe in Dublin means escaping the harsh temperatures engulfing parts of the continent right now. While Dubliners are enjoying beach days, Europe’s early heatwave may be a warning of what lies ahead this summer.

In markets too, it feels like things are set to get hotter. Rocketing demand for memory chips is minting corporate trillionaires by the day with South Korea’s SK Hynix and U.S.-listed Micron each topping $1 trillion in value this week. Samsung hit that mark earlier in the month.

With the AI boom driving demand for chips, Wall Street is full of optimism. UBS has more than tripled its target price for Micron, citing "the structural changes AI has driven to the entire memory complex." That’s after a near 250% rally in the Idaho chipmaker’s stock so far this year.

Retail investors are lapping it up. In recent weeks, U.S. investors have poured billions of dollars into a new exchange-traded fund (ETF) that gives them exposure to Samsung and SK Hynix. South Korea’s 14 million retail investors are also piling in. Breakingviews columnist Robyn Mak points out that with Samsung and SK Hynix accounting for nearly half of the benchmark KOSPI, they are very exposed if AI demand falters.

Right now though, the sheer heat of the AI boom may cause inflationary problems for policymakers already dealing with surging oil prices from the Iran war. It could take years for the productivity gains new Fed Chair Kevin Warsh is counting on to materialise and, in the meantime, markets are pricing in a U.S. rate hike.

We get into the inflation problem facing U.S. President Donald Trump and the Republican party in this week’s Econ World podcast. Higher gas prices, utility bills and mortgage rates are gobbling up wage growth and worsening the affordability crisis facing voters ahead of the midterms. Watch it here

Wage growth isn’t a problem for Samsung’s chip workers. They won a 10-year pay deal that will see some of them receive bonuses of $416,000. Those decisions by Samsung - a bellwether for South Korea Inc - are likely to harden the demands of other domestic unions and could embolden ​more to follow suit.

Samsung staff aren’t the only beneficiaries of supply constraints. An eclectic group of countries, including Argentina, Brunei and Gabon are among the winners from the oil and gas supply problems in the Middle East, says columnist Clyde Russell.

And finally, computing power, which drives the AI boom, is being touted as the new oil of the 21st century and more and more countries are looking at ways of embracing it as a tradable asset. Reuters is reporting that China is designing a futures market for AI tokens, which are used for pricing AI services. It’s a different tack to U.S. exchanges, the CME Group and Intercontinental Exchange, which are preparing to launch futures contracts tied to the cost of renting the computing power for AI. But all these derivative ​products are riffing off the rising cost of computing power.

The headlines

• Trump says he can outwait Iran, dismisses midterm election pressure

• Norway will come under France's nuclear umbrella, leaders say

• Exclusive: Senior Ukrainian commander sees imminent 'turning point' in war

• 'Breakneck' Ebola epidemic in Congo outpaces world's response

The chart

Earlier this month, a record 9.9 million barrels of oil were shipped out ​from the U.S. Strategic Petroleum Reserve (SPR), pushing the total volumes in the U.S. government's emergency stash to its lowest level since July 2024. And that number could keep dropping as the Trump Administration tries to calm global energy markets.

This week, Reuters reported that a cargo of crude oil from the SPR is heading to the Philippines, the first shipment of U.S. emergency ​reserve oil to Asia since November 2022.

The podcast

 "What his fellow Republicans are worried about is that [Trump] loses that amazing sense among even independent voters that he actually understands their lives and is focused on improving their lives. You'll hear a lot of voters say 'it has totally befuddled me, it has totally confused me that he invaded Iran. I thought he was going to focus on my family's costs.' And I think that is his biggest political risk right now."

Sally Buzbee, Reuters U.S. and Canada news editor

Donald Trump campaigned on a promise to bring prices down. Instead, several of his policies - tariffs, the war with Iran - have caused costs to jump. Reuters U.S. and Canada news editor Sally Buzbee and Reuters U.S. economics editor, Dan Burns join this week's Econ World podcast to explain why persistent inflation may cost Republicans at the ballot box in November's midterms.

You can check out the episodehere.

The real world

• Utah: Meet the “data labelers" who trainTesla’s self-driving software - and don't trust the systems they're building

• Brazil: Inside the effort to uphold the legacy of Chief Raoni Metuktire, a 94-year-old Indigenous leader known worldwide for his campaign to protect the world's largest rainforest

• Hong Kong: The island has overtaken Switzerland as the top global booking centre for cross-border wealth

The week ahead

• May 29-31: Shangri-La Dialogue

• June 1: Speech by Fed Governor Jerome Powell

• June 2: U.S. job openings