US equities experienced a volatile session, led by a sharp intraday sell-off in the technology sector, which largely reversed by the close. The S&P 500 closed down -0.26% after trading as low as -2.27% intra-day, while the NASDAQ finished -0.97% lower. The Mag-7 group underperformed at -1.29%, and the Philly semiconductor index dropped -1.93%, though this was less severe than its intra-day low of -8.62% [1]. Despite the tech slump, nearly three-quarters of S&P 500 constituents rose, and the equal-weighted index rallied +0.76%, indicating a rotation into more defensive sectors [1]. S&P 500 (-0.28%) and NASDAQ 100 (-0.45%) futures were slightly lower the following morning [1].
Asia-Pacific markets mirrored the US tech sell-off, with major players like SoftBank and Samsung seeing significant declines. SoftBank lost 9% on the day, dragging Japan's Nikkei 225 lower, while South Korea's Kospi was heavily impacted [2]. There was no clear catalyst for the renewed selling, but investors are awaiting Oracle's earnings report for further direction [2].
Geopolitical tensions escalated as Iran targeted Bahrain, Kuwait, and Jordan with missile attacks following US strikes after the downing of an Apache helicopter. US President Donald Trump claimed a peace deal with Iran is only "days" away, stating negotiations are in their final stages [2]. This contributed to oil market volatility, with US Energy Secretary Chris Wright noting increased oil traffic in the Strait of Hormuz [2].
China's wholesale prices surged at the fastest pace in nearly four years in May, driven by rising raw material costs linked to the Iran conflict and an AI investment boom. However, consumer inflation in China was below estimates [2]. In the US, inflation data due later today is expected to show the consumer price index topping 4% for the first time since May 2023 [2].
SpaceX's IPO is set to raise a record sum at a historic valuation, with a fixed price of $135 per share and all shares ($75 billion worth) allocated to underwriters and asset managers before trading begins on Friday. Elon Musk will retain control as CEO [2]. Market sentiment remains cautious, with volatility and uncertainty driven by both geopolitical developments and the ongoing tech sector sell-off. Investors are closely monitoring support levels on major indices and upcoming earnings and inflation reports for further direction [2].
CONCLUSION
The tech-led sell-off has triggered broad volatility across global markets, with defensive sectors seeing rotation and Asia-Pacific stocks under pressure. Geopolitical tensions and upcoming earnings and inflation data are adding to uncertainty. Investors remain cautious, awaiting further clarity from Oracle's earnings and US inflation reports.