June Nasdaq 100 E-Mini futures (NQM26) are down -1.36% this morning as investors continued to trim exposure to the technology sector, with the focus now turning to key U.S. inflation data.
The price of WTI crude was little changed on Wednesday despite a round of retaliatory strikes between the U.S. and Iran. The U.S. military carried out strikes against Iran on Tuesday in retaliation for the downing of a U.S. Apache helicopter near the Strait of Hormuz. U.S. President Donald Trump ordered the strikes, which the military described as a self-defense action. In response, Iran launched missile and drone attacks on U.S. military bases in Jordan, Kuwait, and Bahrain on Wednesday. The clashes marked one of the largest flare-ups of hostilities since the two countries agreed to a ceasefire in April. Meanwhile, Tehran said it would review the diplomatic process in light of the strikes.
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In yesterday’s trading session, Wall Street’s major indexes closed mixed. Chip stocks sank, with Marvell Technology (MRVL) slumping over -7% and Qualcomm (QCOM) falling more than -5%. Also, software stocks slid, with ServiceNow (NOW) dropping over -6% and Salesforce (CRM) falling more than -3% to lead losers in the Dow. In addition, United Natural Foods (UNFI) plunged over -10% after the food wholesale distributor reported weaker-than-expected FQ3 sales and narrowed its full-year guidance. On the bullish side, J.M. Smucker (SJM) climbed more than +10% and was the top percentage gainer on the S&P 500 after the packaged-food maker posted better-than-expected FQ4 results and issued solid FY27 adjusted EPS guidance.
“As much as we love to see tech’s leadership, it would be constructive to see this rally broaden out to other sectors. When leadership is concentrated in one corner of tech, the market’s foundation gets a little wobblier,” said Bret Kenwell at eToro.
Economic data released on Tuesday showed that U.S. existing home sales rose +3.2% m/m to a 5-month high of 4.17 million in May, stronger than expectations of 4.07 million. Also, the U.S. April trade deficit narrowed to -$55.9 billion, better than expectations of -$56.2 billion.
Today, all eyes are focused on the U.S. consumer inflation report, which is set to be released in a couple of hours. Economists, on average, forecast that the U.S. May CPI will come in at +0.5% m/m and +4.2% y/y, compared to +0.6% m/m and +3.8% y/y in April. Also, the core CPI, which strips out the more volatile food and energy prices, is expected to rise +0.3% m/m and +2.9% y/y in May, compared to +0.4% m/m and +2.8% y/y in April.
Surprisingly strong jobs data released last Friday has put extra focus on the inflation numbers as traders speculate that the Fed’s next move will be a hike. The S&P 500 index is expected to move 0.9% in either direction today, based on the pricing of at-the-money puts and calls, according to Citigroup.
“A hotter-than-expected CPI print would undoubtedly add to mounting fears of a Fed rate hike before year-end. This scenario would provide fresh support for the U.S. dollar while putting renewed downward pressure on U.S. equities,” said Tony Sycamore, an analyst at IG.
The EIA’s weekly crude oil inventories report will also be released today. Economists expect this figure to be -3 million barrels, compared to last week’s value of -8 million barrels.
On the earnings front, cloud-computing and database company Oracle (ORCL) is set to report its FQ4 results today. Market participants will closely watch Oracle’s AI progress, capital spending levels, and margins.
U.S. rate futures have priced in a 98.2% probability of no rate change and a 1.8% chance of a 25 basis point rate cut at the upcoming monetary policy meeting.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.54%, up +0.29%.
The Euro Stoxx 50 Index is down -0.30% this morning as renewed tensions in the Middle East curbed risk appetite, while investors geared up for the European Central Bank’s first rate hike since 2023. Technology and mining stocks slumped on Wednesday as investors rotated into some economically sensitive sectors. Data from the statistics agency ISTAT released on Wednesday showed that Italy’s monthly industrial production unexpectedly rose in April, providing some relief to the country’s long-struggling manufacturing sector. Meanwhile, the European Central Bank’s two-day monetary policy meeting kicks off today, at the conclusion of which it is widely expected to raise the deposit rate by 25 basis points to 2.25% to counter rising energy costs. Attention will center on policymakers’ comments regarding the monetary policy outlook. Elsewhere, the DIW economic institute said on Wednesday that Germany’s economy is likely to enter a technical recession this year as an energy price shock triggered by the Middle East conflict undermines a fragile recovery. In corporate news, STMicroelectronics (STMPA.FP) rose over +1% after BofA upgraded the stock to Buy from Neutral.
Italy’s Industrial Production data was released today.
The Italian April Industrial Production unexpectedly rose +0.5% m/m, stronger than expectations of no change m/m.
Asian stock markets today settled in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.42%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -1.89%.
China’s Shanghai Composite Index closed lower today, tracking a selloff across Asian markets as renewed U.S.-Iran military escalation weighed on sentiment. AI-related stocks were among the biggest losers on Wednesday. Still, the benchmark index’s losses were limited as investors snapped up semiconductor stocks along with defensive bank and liquor shares. Data from the National Bureau of Statistics released on Wednesday showed that China’s producer prices rose for a third consecutive month in May to their highest level since July 2022, as the ongoing conflict in the Middle East continued to push up energy and commodity costs. China’s consumer prices remained elevated, largely due to higher gasoline, gold jewelry, and services prices, but came in slightly below expectations. Inflationary pressure in the consumer sector is subdued, as domestic demand remains weak. Josh Gilbert at eToro said that China will still need a recovery in domestic demand to achieve a healthier pickup in inflation. In other news, the Financial Times reported on Wednesday that companies including Tencent-backed AI start-up StepFun and fast-food chain Home Original Chicken have moved swiftly to unwind their “red-chip” structures ahead of planned overseas listings after Beijing tightened its scrutiny of foreign capital.
The Chinese May CPI fell -0.1% m/m and rose +1.2% y/y, compared to expectations of -0.2% m/m and +1.3% y/y.
The Chinese May PPI rose +3.9% y/y, in line with expectations.
Japan’s Nikkei 225 Stock Index closed lower today as the rotation out of the tech sector resumed. Technology stocks led the declines on Wednesday, tracking overnight losses in their U.S. peers as concerns about stretched AI-related valuations resurfaced. Tech investor Softbank Group sank over -8% after Bloomberg reported that its efforts to secure at least $6 billion through a margin loan backed by its OpenAI stake stalled. SoftBank shares’ drop weighed heavily on the Nikkei. Sentiment was also dampened by renewed U.S.-Iran tensions. Data released on Wednesday showed that Japan’s wholesale inflation picked up in May at the fastest pace in three years as price pressures stemming from the Middle East conflict broadened. Norinchukin Research Institute economist Takeshi Minami said that the jump in Japan’s wholesale inflation offers additional supportive evidence for a rate hike at the Bank of Japan’s meeting next week. Meanwhile, Japanese government bond yields edged higher on Wednesday after an auction of 30-year sovereign debt attracted the weakest demand since June 2025 as lower yields curbed investor appetite. In other corporate news, Nintendo slid over -6% as the company’s gaming pipeline failed to reassure investors concerned about regulatory hurdles in Europe and a deteriorating cost outlook. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +16.42% to 38.01.
The Japanese May PPI rose +0.9% m/m and +6.3% y/y, stronger than expectations of +0.5% m/m and +5.6% y/y.
Pre-Market U.S. Stock Movers
Chip stocks extended their declines in pre-market trading, with Micron Technology (MU) and Advanced Micro Devices (AMD) falling over -3%.
Most members of the Magnificent Seven stocks slid in pre-market trading, with Nvidia (NVDA) dropping about -2% and Tesla (TSLA) falling more than -1%.
Super Micro Computer (SMCI) plunged over -10% in pre-market trading after the company proposed a series of equity and equity-linked financing transactions totaling $7 billion to help fund the purchase of components needed to fulfill recent orders for its advanced AI servers.
Nike (NKE) fell more than -1% in pre-market trading after RBC Capital downgraded the stock to Sector Perform from Outperform.
Illumina (ILMN) rose over +2% in pre-market trading after JPMorgan upgraded the stock to Overweight from Neutral with a price target of $185.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Wednesday - June 10th
Oracle (ORCL), Core & Main (CNM), Chewy (CHWY), Navan (NAVN), Anterix (ATEX), Oxford Industries (OXM), Stitch Fix (SFIX), J.Jill (JILL).
On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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