Wall Street finished Monday in positive territory, driven largely by a comeback in semiconductor stocks that gave the Nasdaq its biggest percentage gain among major indexes. At the same time, oil prices edged lower as traders braced for a potential surge in crude supply following recent conflict.
Here is a look at the key stories shaping the markets today:
1. The U.S. services sector showed signs of slowing momentum, though employment figures within the sector improved.
2. Microsoft announced plans to cut 4,800 positions, representing roughly 2.1% of its total global workforce.
3. Broadcom announced it would extend its chip development partnership with Apple through 2031.
4. South Korean chipmaker SK Hynix launched a share offering in the United States aimed at raising approximately $28 billion, capitalizing on the growing demand for artificial intelligence technology.
5. German industrial orders came in stronger than expected in May as concerns over supply chain disruptions eased.
6. Lockheed Martin announced it will acquire naval defense firm Ultra Maritime from private equity company Advent for $3.45 billion, amid rising global demand for military technology.
Monday’s Market Snapshot:
Stocks: All major U.S. indexes gained ground, with the tech-heavy Nasdaq leading the way. Europe’s STOXX 600 index retreated from a record high it had recently set.
Sectors and Shares: Chip companies were the standout performers. AMD, Qualcomm, and Taiwan Semiconductor each posted gains exceeding 4%. Real estate, housing stocks, and homebuilders were among the weakest performers of the day.
Currency: The U.S. dollar saw little movement overall, while the Japanese yen drifted toward levels that could prompt government intervention, keeping investors on edge.
Bonds: U.S. Treasury yields held relatively steady following last Thursday’s weaker-than-expected jobs report, which had tempered expectations for future interest rate increases.
Commodities: Both front-month WTI and Brent crude oil futures settled down 0.2%. Gold pulled back slightly after reaching a two-week high.
Key Talking Points:
Iran Funeral Processions: Iran is holding a week of large-scale funeral ceremonies for Supreme Leader Ayatollah Ali Khamenei, who was killed along with several family members in an airstrike shortly after the United States and Israel declared war on February 28. Iranian President Masoud Pezeshkian was seen among mourners on the streets of Tehran. However, Mojtaba Khamenei — the son who succeeded his father as leader and was wounded in the same attack — has not been seen publicly.
Euro Zone Recession Risk: The European Stability Mechanism warned that renewed conflict in the Middle East and a potential selloff of U.S. assets represent the two greatest threats to the euro zone economy. If both occur simultaneously, the ESM cautioned, the region could slide into recession and see inflation climb toward 5%. The ongoing Iran conflict and the economic disruption caused by the closure of the Strait of Hormuz — a critical global shipping route — have already rattled financial markets worldwide. As the ESM’s report stated, “Rising political uncertainty, longer-run fiscal sustainability concerns, and stretched equity valuations built on artificial intelligence-related earnings expectations create the potential for a sudden asset price correction emanating from the U.S.”
China Missile Test: China’s military launched a missile from a nuclear-powered submarine into the Pacific Ocean, according to the state-run Xinhua news agency. The move drew sharp condemnation from Japan, Australia, New Zealand, and Taiwan. While Xinhua did not identify the specific missile type, state-controlled outlet the Global Times, citing a military expert, reported it was likely the JL-3 — China’s most advanced submarine-launched missile, which made its public debut at a military parade last year. According to a Pentagon report, the JL-3 has the range to reach the continental United States from Chinese coastal waters.
What Could Move Markets Tomorrow:
Investors will be watching for further developments in the Middle East, any social media posts from Trump, and testimony from Federal Reserve Chair Kevin Warsh before the House Financial Services Committee. Economic data releases will include the U.S. trade balance for May, France’s trade balance for May, and industrial output figures from Germany, Finland, Norway, and Denmark. Inflation data from the Netherlands, Estonia, Hungary, and the Czech Republic are also due. Traders will also be monitoring the possibility of yen intervention by Japanese authorities.
