Dow Jones and Nasdaq Fall More Than 1.5% as Chip Stocks Slide, Oil Rises

Against the backdrop of Trump’s threats of strikes on Iran: oil prices rise more than 3%

Oil prices are extending gains after U.S. President Donald Trump threatened to attack Iran “with great force,” reviving fears that a full-scale war could resume. WTI crude is up 3.7% and trading at $91.5 a barrel, while Brent is up 3.1% to $94.3 a barrel. “We hit them hard yesterday, and we’re going to hit them hard again today,” Trump said in comments broadcast on television. “We’re going to attack them and attack them very hard.” The president warned earlier on social media that Iran “will have to pay the price” for taking too long to negotiate a deal. The escalation in his rhetoric comes after the U.S. military said it had completed strikes against Iranian military targets near the Strait of Hormuz.

Continuing coverage, Robinhood jumps 6.2%

Robinhood is up 6.2% after the stock trading platform operator reported last night that total assets on the platform rose 9% in May from April, and 48% from the same period last year. In addition, CEO Vlad Tenev wrote in a social media post that Robinhood received regulatory approval to serve as an underwriter in initial public offerings.

European close mixed, DAX down 0.9%, FTSE up 0.2%

Trading on European stock exchanges ended mixed, amid volatility in the markets following the escalation between the U.S. and Iran and inflation data in the U.S. Germany’s DAX fell 0.9%, the CAC in Paris lost 0.5%, while London’s FTSE rose 0.2%.

Nike weakens after downgrade

Nike shares are down 1% after RBC downgraded the stock to “sector perform” from “outperform,” saying Nike’s recovery plan is “slower and smaller than we expected.”

Negative open on Wall Street after inflation data and Trump’s threats toward Iran

Stocks in New York opened lower after President Donald Trump signaled that talks with Iran have gone on “too long” and threatened additional measures, as well as amid an acceleration in inflation to a three-year high. The Dow Jones fell 0.6%, the S&P 500 slipped 0.5%, and the Nasdaq is down 0.8%. Chip stocks are leading the declines, with ARM down 6.2%, Broadcom down 2.2%, Qualcomm down 1.9%, Nvidia down 1.8%, Micron down 1.4%, and AMD down 0.9%. The declines in the semiconductor sector continue a pullback seen last week, after weeks of investor enthusiasm.

Oil prices surged and U.S. inflation jumped to 4.2%, a three-year high

U.S. inflation rose above 4% for the first time in three years, due to the surge in oil prices caused by the war in Iran. The U.S. consumer price index rose 0.5% in May from the previous month. The inflation rate jumped to 4.2% from an annual rate of 3.8% recorded in April. The data, which matched analysts’ expectations, mark the highest inflation level since April 2023, when inflation stood at 4.9%. Core inflation, which excludes food and energy prices that are considered volatile, rose 0.2% in May after a 0.4% increase in April and below the expected 0.3%. On an annual basis, core inflation climbed to 2.9%, compared with 2.8% in April and in line with forecasts. High fuel prices in May had an unusual impact on overall inflation, pushing costs at a pace similar to that seen in 2021 and 2022, when inflation was heading toward a four-decade peak and reached 9.1% in June 2022.

Futures losses deepen as tensions with Iran intensify

Losses in New York futures are deepening and oil prices are moving higher after another threat from U.S. President Donald Trump against Iran. Futures on the Dow Jones are down 1%, S&P 500 futures are down 1.1%, and Nasdaq futures are down 1.6%. WTI crude is up 1.2% and trading at $89.2 a barrel, while Brent is up 0.9% to $92.3 a barrel. Trump wrote today that Iran had delayed too long in negotiations over a peace agreement and would now have to “pay the price.” “Iran’s military is a complete and total mess,” the president said in a post on Truth Social. “Much of it, like their navy and air force, is no longer there, they have been completely defeated. Iran only talks and does nothing.” He added that Iran “took too long to negotiate a deal that could have been great for them, now they will have to pay the price!!!”

Oracle loses ground ahead of earnings

Oracle shares are down 2.8% in premarket trading ahead of its results, due to be released this evening after the close in New York. The cloud, computing and data center giant closed yesterday with a market value of $592 billion, after a very modest rise of 5.5% since the start of the year and 16% over the past 12 months.

Nasdaq continues to fall

After falling 1% yesterday and retreating 5.2% over the past five trading sessions, Nasdaq futures are down 1.2%. That comes alongside a 0.6% decline in Dow Jones futures and a 0.7% drop in S&P 500 futures.

Chip stocks fall in premarket trading

Nvidia is down 2.9% in premarket trading, Micron is down 3.7%, AMD is down 3.4%, ARM is down 4.5%, Intel is down 3%, and Broadcom is down 2.2%.

Ahead of U.S. inflation data

The inflation figures due later today in the U.S. are unlikely to encourage investors, and they will be released a week before the Federal Reserve’s next meeting on June 17, the first under the new chair Kevin Warsh. If forecasts are met, annual inflation will cross the 4% level for the first time since May 2023, exactly three years, of course influenced by high oil prices. According to forecasts, the May index will rise 4.2% year over year, the highest level since April 2023, and 0.5% month over month. In April, the index rose 3.8% year over year and 0.6% month over month. Core inflation, which excludes energy and food, is also expected to be high, with annual core inflation forecast at 2.9%, compared with 2.8% in May.

Asian exchanges close lower

The Kospi closed down 4.5%, the Nikkei fell 1.9%, the Hang Seng fell 0.6%, and Shanghai fell 0.4%.

Small moves at the start of the European session

At the open in Europe, the DAX and FTSE are up 0.1%, and the CAC is up 0.4%. In New York, Dow Jones futures are down 0.2%, S&P 500 futures are down 0.3%, and Nasdaq futures are down 0.5%. Oil prices are down 0.5%. At the ends of the DAX, chip maker Infineon is up 1.8%, while business software giant SAP is down 2.9%.

Asia declines worsen, Wall Street futures also fall

After Iran responded to the U.S. strike with launches toward Bahrain, Kuwait and Jordan, the Nikkei is now down 2.4% and the Kospi is falling 6%. In New York at this early hour, Dow Jones futures are down 0.3%, S&P 500 futures are down 0.4%, and Nasdaq futures are down 0.7%.

Super Micro launches stock offering

Super Micro shares fell 7.2% in after-hours trading after the company announced a capital raise, a stock offering totaling $7 billion, to finance the purchase of hardware components for its production lines. The server and data center computing components maker for cloud and artificial intelligence companies said it will issue $5 billion in shares to underwriters and institutional investors, and an additional $2 billion in shares on the market. The share offering will be led by J.P. Morgan, Goldman Sachs and Citigroup. Super Micro closed yesterday with a market value of $24.4 billion, so this is an unusual stock offering worth almost a third of its market value, 29%, which will significantly dilute existing shareholders, and that is why the stock fell sharply. Like other companies in the sector, Super Micro also needs significant funding to meet the huge demand for data centers. The company also updated last night that in recent weeks it had received orders for AI servers totaling $39 billion from more than 20 companies.

Negative trend continues in Asian markets

Markets in Asia are falling after the U.S. strike on Iran. The Nikkei and Hang Seng are down 1.1%, the Kospi is down 3.2%, and Shanghai is down 0.7%. Moderate gains in oil: Brent is up 1% to $92.4 a barrel, and WTI is up the same amount to $89.1 a barrel. President Trump accused Iran of shooting down a U.S. Army Apache helicopter over the Strait of Hormuz and declared, “We will have to respond.” Shortly after midnight, U.S. Central Command said it had launched attacks “in self-defense” against Iran, on Trump’s orders. “The mission is a proportionate response to the unprovoked Iranian attack,” it said. Samsung, the semiconductor giant, is down 5.5% in Seoul, alongside a 6% drop in rival SK Hynix. Electronics giant LG is falling 7%. SoftBank is down 9.2% at the bottom of the Nikkei. Also prominent in red in Tokyo is Nintendo, which is falling 7% after failing at an investor conference to present an outlook for new hit games for the Switch 2 platform. On the other hand, Japanese chip stocks at the top of the index are posting sharp gains, with Screen jumping 7% and Tokyo Electron rising 5.5%. At the ends in Hong Kong, Lenovo is down 6.3% at the bottom of the Hang Seng, while two telecom giants are at the top of the index, China Unicom Hong Kong, the local arm of China Unicom, is up 6.3% and China Telecom is up 5.7%. Inflation data in China showed the consumer price index rose 1.2% in May year over year, similar to April and slightly below forecasts of 1.3%. On a monthly basis, the index fell 0.1%, versus expectations for a 0.2% decline. China’s producer price index jumped 3.9% in May year over year, its highest level since July 2022, under pressure from higher oil prices and the boom in AI investment. Forecasts had called for a 3.8% increase, after a 2.8% annual rise in April. In Japan, the producer price index jumped 6.3% in May year over year, well above forecasts of 5.5%, after 5.3% in April. On a monthly basis, producer prices rose 0.9%, versus expectations for a 0.5% increase.