June S&P 500 E-Mini futures (ESM26) are up +0.79%, and June Nasdaq 100 E-Mini futures (NQM26) are up +1.21% this morning as investors stepped in to buy the dip after the swift end to the latest round of U.S. strikes against Iran fueled expectations that talks over a peace deal will resume.
The U.S. launched a new wave of attacks on Iran on Wednesday, hitting multiple targets on President Trump’s orders. U.S. forces struck surveillance systems, air defense sites, and communications networks. The American military characterized the attacks as “additional self-defense strikes” in response to Iran’s “unwarranted and continued aggression.” About four hours after launching the attacks, U.S. Central Command declared the operation concluded. Iran retaliated by launching attacks on U.S. bases in Kuwait, Bahrain, and Jordan.
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Concerns about further escalation lingered as President Trump told Fox News the U.S. would strike Iran again if its leaders did not sign an interim peace deal. Iran’s foreign ministry said the latest strikes had made the existing ceasefire agreement “meaningless.” Still, WTI crude oil prices erased earlier gains and edged lower as investors took comfort in the view that further escalation was in neither side’s interest.
Investors are now awaiting crucial U.S. producer inflation data.
In yesterday’s trading session, Wall Street’s three main equity benchmarks ended in the red. Super Micro Computer (SMCI) tumbled about -28% and was the top percentage loser on the S&P 500 after the company announced a plan to raise $7 billion through a series of equity offerings to help fund the purchase of components needed to fulfill recent orders for its advanced AI servers. Also, chip and AI infrastructure stocks slumped, with Qualcomm (QCOM) sliding more than -6% and Western Digital (WDC) falling over -5%. In addition, shares of trucking companies declined after Amazon said it had expanded its LTL freight service to deliver to any destination in the U.S., with FedEx Freight Holding Co. (FDXF) slumping more than -6% and Old Dominion Freight Line (ODFL) dropping over -5%. On the bullish side, Casey’s General Stores (CASY) popped more than +20% and was the top percentage gainer on the S&P 500 after the company reported better-than-expected FQ4 results.
The U.S. Bureau of Labor Statistics report released on Wednesday showed that consumer prices rose +0.5% m/m in May, in line with expectations. On an annual basis, headline inflation rose +4.2% in May, matching expectations and marking the fastest pace of increase in more than three years. Also, the core CPI, which excludes volatile food and fuel prices, rose +0.2% m/m and +2.9% y/y in May, compared to expectations of +0.3% m/m and +2.9% y/y. Overall, the figures matched expectations, with investors saying they are unlikely to put additional pressure on the Fed to raise interest rates.
“It’s very possible that things wrap up in the Middle East and shipping gets back to normal over the course of the rest of the year, in which case we can see inflation come down over time, and the Fed could hold off raising rates. But if things stay as they are currently, then all bets are off,” said Chris Zaccarelli at Northlight Asset Management.
Meanwhile, U.S. rate futures have priced in a 98.3% chance of no rate change and a 1.7% chance of a 25 basis point rate cut at next week’s monetary policy meeting.
Today, all eyes are focused on the U.S. Producer Price Index, which is set to be released in a couple of hours. Economists, on average, forecast that the U.S. May PPI will rise +0.7% m/m and +6.4% y/y, compared to the previous figures of +1.4% m/m and +6.0% y/y.
The U.S. Core PPI will also be closely monitored today. Economists expect a core measure of wholesale inflation to rise +0.5% m/m and +5.4% y/y in May, compared to +1.0% m/m and +5.2% y/y in April.
U.S. Initial Jobless Claims data will be released today as well. Economists project this figure to be 220K, compared to last week’s number of 225K.
On the earnings front, creative software company Adobe (ADBE) and homebuilder Lennar (LEN) are set to report their quarterly figures today.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.53%, down -0.61%.
The Euro Stoxx 50 Index is up +0.45% this morning as investors evaluate the evolving situation in the Middle East and prepare for the European Central Bank’s first rate hike since 2023. Mining and energy stocks led the gains on Thursday. Semiconductor stocks also climbed as investors returned to AI-exposed names following a volatile few days for the sector. At the same time, telecom and real estate stocks underperformed. In addition, software stocks slid after Oracle reported disappointing quarterly results for its software business, and UBS downgraded European IT stocks to Neutral from Attractive. Investors are now looking ahead to the interest rate decision from the European Central Bank. The ECB is widely expected to raise the deposit rate by 25 basis points to 2.25% later today to counter energy-driven inflationary pressures. Attention will center on remarks from ECB President Christine Lagarde regarding policymakers’ outlook for the months ahead. In corporate news, Hugo Boss (BOSS.D.DX) climbed over +8% after Britain’s Frasers Group made a $2.3 billion takeover bid for the struggling company.
The European economic data slate is empty on Thursday.
Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.16%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.06%.
China’s Shanghai Composite Index closed slightly lower today as investors kept a close eye on developments in the Middle East. The U.S. carried out new strikes against Iran on Wednesday after President Trump said Tehran was “playing us for suckers.” About four hours after launching the attacks, U.S. Central Command declared the operation concluded, boosting expectations that peace talks would get back on track. Technology stocks advanced on Thursday, allowing the benchmark index to recoup most of its early losses. Meanwhile, DBS Group Research’s Jason Sum said that Chinese airline stocks now present a more balanced risk-reward profile after their share prices dropped sharply. In corporate news, J&T Global Express slumped over -4% in Hong Kong after regulators launched an investigation into the company’s safety measures. Investor focus now shifts to China’s May credit lending data to gauge the health of the nation’s economy, following an unexpected contraction in new yuan loans in April.
Japan’s Nikkei 225 Stock Index reversed earlier losses and closed slightly higher today as investors assessed the latest developments in the Middle East conflict. The benchmark index initially fell nearly -3% as AI-related stocks sank after U.S. forces carried out strikes on multiple targets in Iran, but later erased those losses and turned green as sentiment improved after U.S. Central Command declared the operation complete. Investors interpreted it as a signal for Iran to swiftly move toward an agreement. Gains in energy and food stocks led the overall market higher on Thursday. A government survey released on Thursday showed that Japanese business sentiment deteriorated in the second quarter for the first time in four quarters, signaling mounting economic strain from the Middle East conflict. Meanwhile, the Bank of Japan said on Wednesday that Governor Kazuo Ueda has been hospitalized for medical treatment and will be absent from the June 15-16 policy meeting. Deputy Governor Ryozo Himino will oversee the rate review in Ueda’s absence, while the other deputy governor, Shinichi Uchida, is set to host the post-meeting press conference. JPMorgan economist Ayako Fujita said that Governor Ueda’s hospitalization is unlikely to materially affect next week’s policy decision. “The direction toward a rate hike already appears widely shared among board members, making a heavily split decision unlikely,” Fujita said. In other news, foreign investors sold a net 701 billion yen ($4.37 billion) worth of Japanese stocks in the week through June 6th, marking a second consecutive week of net selling, according to Ministry of Finance data. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +0.55% to 38.22.
The Japanese BSI Large Manufacturing Conditions Index stood at -1.8 in the second quarter, weaker than expectations of 4.2.
Pre-Market U.S. Stock Movers
Chip and AI infrastructure stocks advanced in pre-market trading, with Lam Research (LRCX) rising over +4% and Micron Technology (MU) gaining more than +3%.
The Magnificent Seven stocks edged higher in pre-market trading, with Tesla (TSLA) and Nvidia (NVDA) advancing over +1%.
Intel (INTC) climbed over +4% in pre-market trading after BofA double-upgraded the stock to Buy from Underperform with a price target of $135.
General Dynamics (GD) rose more than +1% in pre-market trading after Jefferies upgraded the stock to Buy from Hold with a price target of $400.
Oracle (ORCL) slumped more than -7% in pre-market trading after the software and cloud-computing company reported quarterly capital expenditures that exceeded estimates. Also, the company said it plans to spend about $70 billion on net capital expenditures in the current fiscal year.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Thursday - June 11th
Adobe (ADBE), Lennar (LEN), RH (RH), McGraw Hill (MH), Driven Brands Holdings (DRVN), Critical Metals (CRML), Mesabi Trust (MSB), The Lovesac Company (LOVE), Friedman Industries (FRD), Hooker Furnishings (HOFT), Vera Bradley (VRA).
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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