Wall Street stocks closed lower Tuesday, following European markets downward as a wave of selling hit technology shares — particularly chipmakers — while fresh unrest in the Middle East sent crude oil prices climbing.
Here is a look at the major stories shaping markets on Tuesday:
1. The U.S. trade deficit grew by 42.1% in May, reaching $77.6 billion — just $900,000 less than what analysts had forecast.
2. New York Federal Reserve President John Williams said he is less concerned about inflation than he once was, pointing to recent declines in energy prices as a reason for his eased worry.
3. Two oil tankers were struck in the Strait of Hormuz as large crowds gathered in the Iranian city of Qom on the fifth day of mourning following the death of Iran’s Supreme Leader, Ayatollah Ali Khamenei.
4. Meta Platforms announced the launch of Muse Image, its first artificial intelligence image generation model, as the company behind Facebook continues expanding its generative AI offerings across its platforms.
5. Nigel Farage, the leader of the populist Reform UK Party in Britain, announced he was stepping aside to address accusations that he failed to report millions of pounds worth of gifts.
Key Market Moves for Tuesday:
Stocks: All three major U.S. indexes finished in negative territory, with the Nasdaq leading losses. Europe’s STOXX 600 index was also pulled lower by the tech sector selloff.
Sectors: Industrial and technology stocks posted the largest percentage declines. Energy shares were the day’s top performers. Semiconductor stocks fell 4.7%.
Currency: The U.S. dollar edged slightly higher while the Japanese yen hovered near a 40-year low, keeping traders on alert for possible government intervention.
Bonds: The yield on the benchmark U.S. Treasury note climbed to a four-week high as investors tracked escalating geopolitical tensions.
Commodities: Front-month futures for both West Texas Intermediate and Brent crude oil settled higher — up 2.8% and 3.0% respectively. Gold prices fell despite the rise in Middle East tensions.
Other Stories in Focus:
A French appeals court upheld the conviction of far-right leader Marine Le Pen for misuse of public funds, but reduced the length of her ban from seeking public office. Although Le Pen will be required to wear an electronic ankle bracelet — which could complicate her ability to campaign — her National Rally party is currently leading in polls with less than a year before centrist President Emmanuel Macron is expected to leave office.
SpaceX officially joined the Nasdaq 100 index Tuesday, a move analysts expect will trigger billions of dollars in automatic buying by index-tracking funds. Brokers have largely issued bullish outlooks on the rocket and satellite company, which is valued at more than $2 trillion. SpaceX made its stock market debut on June 12, and while its share price is up 10.7% from its initial offering price of $135, it has dropped 7.7% so far this week.
The United States was knocked out of the World Cup following a painful 4-1 loss to Belgium — a match that was overshadowed by controversy surrounding alleged political interference by President Donald Trump. The allegations stem from Trump’s reported pressure on FIFA President Gianni Infantino to reconsider a red-card suspension handed to Folarin Balogun, the top goal scorer for the U.S. team. Infantino stated that FIFA’s decision-making process was “independent.”
What Could Influence Markets Wednesday:
Traders will be watching for new developments in the Middle East, shifts in energy markets, social media posts from President Trump, and the release of minutes from the Federal Reserve’s June meeting. Currency traders will also monitor the possibility of yen intervention. Economic data releases from the Netherlands, Sweden, and Norway are also on the calendar, along with U.S. consumer credit figures for May.
