Markets Overview

  • ASX SPI 200 futures down 0.8% to 8,600.00
  • S&P 500 down 1.6% to 7,266.99
  • Dow Average down 1.9% to 49,918.78
  • Aussie down 0.5% to 0.6996 per US$
  • US 10-year yield rose 3.9bps to 4.5562%
  • Australia 3-year bond yield fell 4 bps to 4.51%
  • Australia 10-year bond yield fell 2.9 bps to 4.89%
  • Gold spot down 4.5% to $4,070.90
  • Brent futures up 3.6% to $94.73/bbl

Economic Events

  • 10:30: (AU) Australia to Sell A$1 Billion 91-Day Bills on June 11
  • 10:30: (AU) Australia to Sell A$1 Billion 133-Day Bills on June 11
  • 11:00: (AU) June Consumer Inflation Expectation, prior 5.6%

Oil jumped, while US stock futures declined after American forces started new strikes on Iran, putting further strain on a fragile ceasefire and threatening to prolong the conflict in the Middle East that’s upended global markets.

West Texas Intermediate crude surged as much as 2.7% to $92.45 a barrel after the US military said it had launched strikes on multiple targets in Iran for a second straight day, escalating tensions in the Middle East. S&P 500 futures fell 0.3% and Nasdaq 100 contracts lost 0.5%, extending declines after both benchmarks retreated in the US session. Contracts for Asian stocks pointed to losses.

The latest strikes highlighted President Donald Trump’s growing impatience with stalled peace efforts after months of failed negotiations. They also reinforced the view that an April ceasefire has effectively collapsed, despite the absence of a return to the large-scale bombing campaign seen at the start of the conflict.

“We’re going to be attacking them, attacking them very hard,” Trump told reporters at the White House Wednesday, before the latest strikes were announced. “We hit them hard yesterday, and we’re going to hit them hard again today.”

In the US, shares of chipmakers and other AI infrastructure companies, this year’s biggest winners, fell for a second day Wednesday. Chip bellwether Nvidia Corp. dropped 3.7%, Broadcom Inc. dropped 5.1% while Super Micro Computer slid 28% after unveiling plans for a $7 billion equity raise. Oracle Corp. shares slipped in extended trading after reporting quarterly capital expenses that were higher than estimates.

The flare-up in Middle East tensions overshadowed a softer-than-expected US inflation report that had offered some relief to investors. Equities remained under pressure as resilient economic data had led traders to boost bets on Federal Reserve rate cuts, extending a rotation out of the technology stocks that had driven markets higher for most of the year.

“Investors remain skittish despite being thrown a lifeline by the inflation figures,” said Chris Beauchamp, chief market analyst at IG. “It is now a case of ‘once bitten, twice shy’ – no one wants to go charging in to buy the dip yet, which suggests more of a drift lower for the time being, though leaving the overall trend intact.”

Elsewhere, gold extended declines on Thursday after falling 4.4%, while a gauge of the dollar was mostly flat.

The core consumer price index, which excludes food and energy prices, increased 0.2% from April, under the 0.3% consensus forecast among economists polled by Bloomberg.

Bond traders maintained bets that the Fed will raise interest rates by the end of the year. While Treasury yields initially dipped after the data on Wednesday, they resumed climbing with oil prices later in the session. Interest-rate swaps showed traders are still fully pricing in a rate hike by December.

“It’s clear that rate cuts are off the table, and while there is chatter about a potential rate hike, we believe it’s unlikely that we’ll see a rate hike before the midterm elections,” wrote Skyler Weinand, chief investment officer at Regan Capital.

Investors were also bracing for a wave of equity issuance unlike anything seen in recent history. Companies racing to fund artificial-intelligence investments are seeking to raise vast sums, raising questions about whether demand can absorb the supply and what it may mean for valuations.

SpaceX’s initial public offering has attracted orders worth more than four times the shares on offer, according to people familiar with the matter. The company is selling 555.6 million shares at $135 apiece, a deal that would raise about $75 billion and value the company at roughly $1.8 trillion.

In Asia, Bank of Japan Governor Kazuo Ueda has been hospitalized and is expected to miss next week’s policy meeting, the central bank said. Investors continue to expect the BOJ to lift its policy rate to the highest level since 1995, with Ueda’s absence seen having little impact on the decision after several board members signaled support for a hike since the last gathering.