General Market News

Wall Street's AI-driven tech rally is facing significant pressure following Broadcom's disappointing guidance and stronger-than-expected jobs data. Markets now anticipate up to 50 basis points of Fed rate hikes by year-end, a sharp reversal from earlier expectations of cuts. Investors are taking profits after extraordinary gains, with some chip stocks up over 200% in two months.

• Advanced Micro Devices, Micron Technology, and Marvell Technology surged 167%, 240%, and 283% respectively in just over two months before the recent selloff
• Market expectations shifted dramatically from two 25-basis point Fed rate cuts in 2026 to potential 50 basis points of rate hikes by year-end following strong payroll data
• New Fed Chair Kevin Warsh's first FOMC meeting next week will release economic projections, providing critical insight into policy direction as SpaceX and other major tech IPOs absorb market capital

U.S. producer price inflation (PPI) surged to 6.5% in May, the highest since November 2022, but core PPI missed expectations at 4.9%, suggesting the spike was energy-driven rather than broad-based. The Federal Reserve may hold rates steady despite the headline number because core inflation indicators show underlying price pressures are not accelerating dramatically. This creates a balancing act between risking slower growth with rate hikes or allowing producer costs to potentially seep into consumer prices.

• Headline PPI hit 6.5% year-over-year (above 6.4% expectations), but core PPI remained flat at 4.9%, well below the 5.4% forecast, indicating energy and commodities drove the increase rather than widespread inflation
• The softer core reading mirrors yesterday's CPI report where consumer inflation rose to 4.2% but core CPI was only 2.9%, giving the Fed room to pause rate hikes
• President Trump's 'I love inflation' comment drew scrutiny, contradicting his 2024 campaign criticism of Biden-era price increases, though political messaging does not impact Fed policy decisions focused on price stability

May producer price inflation (PPI) surged to 6.5% year-over-year, the highest since November 2022, but core PPI came in at 4.9%, missing expectations of 5.4%. The softer core reading suggests energy drove the headline spike rather than broad-based inflation, giving the Federal Reserve room to pause rate hikes despite the elevated headline number.

• Core PPI at 4.9% unchanged from April and below the 5.4% forecast, indicating underlying inflation pressures may not be accelerating as feared
• Energy and commodity swings drove the headline increase, similar to the CPI report where core inflation remained moderate at 2.9%
• The Fed faces a dilemma between raising rates to combat producer inflation and holding steady to avoid slowing economic growth, with current data favoring a pause

US stocks rebounded on Thursday with the Dow jumping 246 points, driven by a recovery in semiconductor stocks including Nvidia, Intel, and Micron after Wednesday's steep selloff. The gains came despite heightened geopolitical tensions with Iran that pushed oil prices to around $90 per barrel, limiting broader market advances. The S&P 500 has declined about 4% from its early June record high, while technology stocks remain in correction territory.

• Intel received a boost from a Bank of America upgrade citing growing CPU demand and AI opportunities, helping lift the semiconductor sector after a 10% weekly decline
• President Trump signaled potential military action against Iran including targeting Kharg Island oil infrastructure, pushing WTI crude futures up nearly 1% to $90 per barrel
• Oracle shares sank following announcements of aggressive AI infrastructure spending plans, while May producer prices rose 0.8% month-over-month, exceeding the 0.7% forecast

Stock futures pointed higher following two days of declines driven by tech sector weakness and inflation concerns. Key market movers include Oracle stock sinking on fundraising plans despite beating earnings, and investors awaiting May wholesale inflation data after consumer prices showed elevated readings. Adobe earnings and potential Microsoft Xbox layoffs are also in focus.

• Oracle stock fell into negative territory for the year after announcing plans to raise $10 billion in debt and $5 billion through stock sales in fiscal 2026, plus another $40 billion in fiscal 2027, despite beating earnings estimates
• May wholesale inflation report expected to show 0.7% price increase, following consumer price data that showed persistent inflation driven by surging fuel prices from the Iran war
• Microsoft planning 'major' Xbox layoffs under new division CEO Asha Sharma to be announced after fiscal year ends in June, following years of gaming acquisitions and studio closures to improve margins

US stocks opened higher on Thursday, led by Nasdaq semiconductor stocks rebounding over 1%, despite President Trump warning of imminent strikes on Iranian oil infrastructure. This follows a steep sell-off the previous day triggered by hotter-than-expected inflation data showing May CPI accelerating to 4.2% annually. May PPI inflation also rose sharply to 6.5% year-over-year, the fastest pace since late 2022, raising concerns about prolonged elevated interest rates.

• Nasdaq led the rebound with Intel up nearly 10%, followed by Lam Research, Applied Materials, ARM, AMD, and ASML, while the Dow and S&P 500 gained 0.8%
• Trump's warning of strikes on Iran's Kharg Island and other oil sites sent crude oil prices rebounding above $90/barrel after falling overnight from $93
• Producer price inflation for finished goods excluding food and energy is projected to rise at a 5% annual pace in coming months due to upstream pressure from intermediate input costs that jumped 1.8% in May

U.S. producer prices rose 1.1% in May, exceeding the 0.7% forecast, driven primarily by energy cost increases linked to the Middle East conflict. The annual PPI gain of 6.5% marked the largest increase in 3.5 years. Rising inflation alongside labor market stability has led markets to price in a potential Federal Reserve rate increase, though economists believe the policy tightening bar remains high.

• Energy products accounted for nearly 80% of the PPI increase, with a 2.8% rise in goods prices, while the U.S.-Israeli war with Iran has strained global supply chains through Strait of Hormuz shipping restrictions
• Annual PPI increased 6.5% through May, the biggest rise since November 2022, while consumer inflation (CPI) jumped above 4% for the first time in three years
• The Fed is expected to maintain rates at 3.50%-3.75% at next week's meeting but may abandon its easing bias, with economists forecasting PCE inflation could reach 4.0% in May, the largest increase since May 2023

U.S. wholesale prices increased 1.1% in May, surpassing economists' expectations of 0.7%, according to the Bureau of Labor Statistics. The annual producer price index reached 6.5%, the highest rate since November 2022, indicating growing pipeline inflationary pressures in the economy.

• The monthly PPI gain of 1.1% significantly exceeded the consensus forecast of 0.7%, suggesting stronger inflation than anticipated
• Annual wholesale inflation hit 6.5%, marking the highest rate in approximately 18 months since November 2022
• Core PPI (excluding food and energy) rose 0.4%, below the expected 0.5%, indicating that rising fuel prices are driving much of the overall inflationary pressure

The Chicago Federal Reserve released data showing inflation-adjusted consumer spending on food and services fell 1.3% in May, reversing earlier gains and raising recession concerns. This spending decline coincides with rising inflation (CPI hit 3.1% in May) and warnings from economists about a potential negative feedback loop. However, the labor market remains relatively resilient with 172,000 jobs added in May and 4.3% unemployment, suggesting the economy has not entered a full downturn.

• Inflation-adjusted food and services spending dropped 1.3% in May after being flat in April and up 0.8% in February, marking a sharp deterioration in consumer demand
• Moody's Chief Economist Mark Zandi warns that rising prices, slowing consumer demand, and labor market deterioration could create a negative feedback loop threatening growth
• Consumer spending accounts for roughly two-thirds of U.S. economic activity, making this decline significant despite continued job growth and AI-driven corporate investment

The University of Michigan's Consumer Sentiment Index plunged to a record low of 44.8 in May 2026, driven by high prices cited by 57% of respondents, yet retail sales remain strong at $757 billion in April. The critical disconnect between collapsing sentiment and continued spending creates uncertainty for both the Federal Reserve's rate policy and future consumer behavior, with inflation expectations rising to 3.9% long-term.

• Consumer sentiment fell 10% month-over-month and 14.2% year-over-year to 44.8, the lowest in survey history, while retail sales reached $757.1 billion in April, up 0.5% from March
• Long-run inflation expectations jumped to 3.9% from 3.5%, and year-ahead expectations rose to 4.8%, constraining the Fed's ability to cut interest rates
• Early spending weakness emerged in discretionary categories, with motor vehicle outlays declining $9.2 billion in April, signaling potential broader consumer pullback in coming months

U.S. stocks are experiencing significant selling pressure, particularly in tech and AI stocks, prompting traders to assess the probability of bear markets across major indexes by August 31. Options market data reveals varying odds of 20% declines: 21% for the S&P 500, 32% for the Nasdaq, and 24% for small-caps, reflecting concentrated volatility in technology stocks.

• A 20% decline in the S&P 500 from its high of 7,610 would bring it to 6,088, with options pricing a 10.5% chance of closing at that level by August 31 (roughly 21% chance of touching that price)
• The Nasdaq faces higher bear market odds at 32% due to elevated implied volatility of 33 versus 22 in the S&P 500, driven by selling in big-tech AI winners and FOMO selling for SpaceX liquidity
• The last technical bear market in the S&P 500 occurred during the 10-month downturn in 2022 amid rising interest rates, with a 21% intraday decline in 2025 during tariff-related selling

US stock futures surged on Thursday, with Dow futures up 370 points and Nasdaq futures gaining 1.2%, as investors bought into the previous day's tech selloff that pushed major indexes down over 1%. Chipmakers led the premarket recovery while easing oil prices from progress in US-Iran talks helped reduce inflation concerns ahead of key Producer Price Index data.

• Semiconductor stocks rebounded strongly with NVIDIA, Intel, and Micron rising 1.2% to 4.7% in premarket trading after Wednesday's correction pushed parts of the tech sector down over 10%
• Progress in US-Iran diplomatic talks and expectations for Strait of Hormuz reopening pushed oil prices lower, easing inflation fears that could keep the Fed hawkish
• Investors await Producer Price Index and jobless claims data at 8:30 am ET, which will be critical after May consumer prices rose at the fastest pace in three years due to higher energy costs

Japanese rare earth magnet manufacturer Shin-Etsu Chemical plans to build a new rare earth refining facility in Fukui prefecture to strengthen supply chains amid China's export controls on heavy rare earths to Japan. The move reflects growing efforts by Japan and Western nations to diversify critical mineral supply away from China, the world's largest rare earths producer.

• The facility will be Shin-Etsu's first rare earth refining plant since 2008, with total investment expected to be at least 35 billion yen ($218 million) and government subsidies of 17.5 billion yen
• China has halted exports of several heavy rare earths to Japan for at least four months, coinciding with diplomatic tensions over Taiwan and demonstrating Beijing's use of critical minerals as leverage
• Japan has signed agreements with Australia on critical minerals cooperation and is coordinating with France on rare earth supply chains to reduce dependence on China

Treasury yields remained steady Thursday as investors digested May inflation data showing U.S. prices rose 4.2% year-over-year, the fastest pace since 2023, while monitoring escalating Middle East tensions following U.S. missile strikes on Iran. The 10-year Treasury yield held at 4.54%, with markets awaiting producer price index data expected to show a 0.7% monthly jump.

• May consumer price inflation increased 0.5% monthly and 4.2% annually, up from April's 3.8% and matching market expectations
• U.S. strikes on Iranian targets and Kuwait's temporary airspace closure heightened geopolitical tensions, though oil prices reversed early gains to fall over 1%
• Producer price index data due later is expected to show a 0.7% month-on-month increase in May, adding to inflation concerns

Oil prices jumped over 2.5% on Thursday after the U.S. launched additional military strikes against Iran, raising concerns about prolonged disruptions to energy supplies. WTI crude rose 2.94% to $92.68 per barrel while Brent gained 2.52% to $95.45 per barrel as tensions escalated in the Middle East.

• U.S. Central Command conducted self-defense strikes against multiple Iranian targets at 5:15 p.m. ET in response to what it called 'unwarranted and continued aggression'
• Iranian state media reported Tehran launched missile and drone attacks against U.S. vessels in the Strait of Hormuz, a critical energy chokepoint
• Rystad Energy notes the oil market is better positioned to absorb disruptions due to record U.S. crude exports and softer Chinese demand, though prices remain vulnerable to sharp swings if conflict escalates

President Trump's recent embrace of elevated inflation figures marks a sharp shift from his criticism of former Fed Chair Jerome Powell, potentially giving new Fed Chair Kevin Warsh flexibility on interest rates ahead of his first policy meeting. Trump called May's 5.1% inflation rate 'great' and expressed confidence it will fall after the Iran war ends, aligning with Warsh's view that the energy shock is temporary. This represents a dramatic U-turn from Trump's years of pressuring Powell to cut rates faster.

• Inflation hit 5.1% in May 2026, the highest in three years, driven largely by the Iran war disrupting oil transit through the Strait of Hormuz, but core CPI excluding energy and food rose only 2.9%
• Warsh will chair his first Fed meeting next week with markets expecting rates to hold steady at 3.5%-3.75%, as both he and Trump support 'looking through' the temporary supply shock rather than raising rates
• Trump's hands-off approach to Warsh contrasts sharply with his treatment of Powell, whom he called 'stupid' and targeted through investigations into his deputy and Fed office spending

Foreign investment in the US surged 49.5% to $232.2 billion in 2025, ending four consecutive years of declines. The increase is attributed to companies seeking to avoid President Trump's tariffs by establishing US operations and favorable exchange rates due to a weaker dollar. The investments created 213,100 jobs, primarily through acquisitions and expansions of foreign-owned businesses.

• Publishing industries, driven by software publishers, received the largest share at $50.7 billion, with AI investment playing a significant role according to economists
• Japan led all countries with $50.5 billion in investments, while Europe contributed over 50% of total investment at $116.6 billion
• California received the most state investment at $59.7 billion, followed by Texas ($21.5 billion) and Pennsylvania ($20.9 billion), with manufacturing industries attracting $121.8 billion overall

President Trump has claimed more than 30 times over nearly three months that a peace deal with Iran is imminent, but no agreement has materialized. Despite the lack of follow-through, stock and oil markets continue to react positively to his repeated assertions, driven by hopes that a deal will end the conflict and reopen the Strait of Hormuz. The U.S.-Iran ceasefire remains fragile with ongoing military flare-ups, yet markets maintain optimism that economic and political pressures will eventually force a resolution.

• Oil prices and equities repeatedly move on Trump's deal announcements, with crude falling after his claims despite no actual agreements emerging since mid-March
• Trump announced a two-week ceasefire on April 7 to 'finalize' a deal, but the deadline passed without resolution and military tensions have since escalated with both sides accusing ceasefire violations
• Analysts believe market optimism persists because both sides face strong incentives to reach a deal, with Iran's economy battered and Trump's political standing affected by the prolonged conflict

Tech stocks experienced a sharp sell-off, wiping out nearly $480 billion from the S&P 500 as investor sentiment shifted to 'fear' territory. The decline follows an 'unsustainable' rally in AI and chip stocks, with rising bond yields and inflation concerns driving the pullback. Market experts indicate the 10-year Treasury yield at 4.5% represents a critical threshold for equity performance.

• The tech-focused Nasdaq Composite extended losses while CNN's Fear & Greed Index moved into 'fear' territory, with the VIX volatility measure rising
• Roughly $500 billion in market value was erased from tech-sector and Magnificent 7 stocks, with analysts describing the sector as 'extremely overbought'
• The 10-year Treasury yield at 4.5% is viewed as a 'line in the sand' for equity markets, with stocks struggling when yields rise above that level amid inflation concerns

May's inflation report showed headline inflation accelerating to a three-year high, driven by fuel prices amid Middle East conflict. However, core inflation rose only 0.2% monthly, below expectations, easing concerns that the Federal Reserve might need to raise interest rates this year. The mixed data narrowed the path for stock market gains while slightly improving rate cut odds.

• Core inflation (excluding food and energy) rose 0.2% monthly, below forecasts, reducing immediate pressure on the Fed to hike rates
• Traders now see a 1% chance of a Fed rate cut before year-end, up from less than 0.5% before the report; 10-year Treasury yield fell from 4.54% to 4.52%
• Experts warn continued closure of Middle East shipping routes could push oil prices higher and spill into core inflation, threatening the market rally that depends on stable interest rates