[New York Stock Exchange] Sharp Decline Across the Board... Escalating Middle East Tensions and Semiconductor Sell-Off

Trump Vows to "Attack Very Strongly" as Pressure Mounts
Semiconductor Sell-Off Continues
Both Gold Spot and Futures Decline

On June 10 (local time), all three major U.S. stock indexes closed lower on the New York Stock Exchange. This was due to renewed tensions in the Middle East after U.S. President Donald Trump ramped up pressure, stating that the United States would "strike very forcefully" against Iran. Additionally, ongoing sell-offs in semiconductor stocks ahead of the SpaceX listing led to steeper declines late in the session.

On the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 49,918.78, down 953.33 points (1.87%) from the previous trading day. The S&P 500, which focuses on large-cap stocks, fell 119.66 points (1.62%) to close at 7,266.99, while the tech-heavy Nasdaq Index ended at 25,169.501, down 509.321 points (1.98%).

View of the New York Stock Exchange. New York, USA - Photo by Yoonju Hwang

On this day, President Trump declared, "We will strike them very forcefully," and added, "Iran has delayed negotiations for too long, and now they will have to pay the price." As Iran also took a confrontational stance, investor sentiment was sharply dampened.

International oil prices also surged. On the New York Mercantile Exchange, West Texas Intermediate (WTI) crude for July delivery gained 2.07% to settle at $90.03 per barrel. On the ICE Futures Exchange, Brent crude for August delivery rose 1.80% to $93.10 per barrel.

Jed Ellerbrook, portfolio manager at Argent Capital Management, commented, "Talk of war with Iran is truly significant. While investors' expectations may prove accurate and a deal with Iran could reopen the Strait, if that does not happen, oil prices are bound to rise sharply." He added, "You simply cannot feel secure in this kind of investment environment."

Profit-taking in the semiconductor sector ahead of the SpaceX initial public offering (IPO) also weighed on the stock market. Major stocks such as Micron (-4.70%), AMD (-4.86%), Nvidia (-3.73%), Broadcom (-5.01%), and SanDisk (-0.96%) all closed lower.

CNBC analyzed that small retail investors are selling popular semiconductor stocks to make room in their portfolios for what is expected to be the largest IPO ever.

Mark Hackett of Nationwide stated, "After a historic rally, the group finally got some breathing room, and profit-taking was necessary to maintain positions within the risk range."

He continued, "With last week's Google IPO, this week's SpaceX IPO, and the potential for IPOs from Meta, OpenAI, and Anthropic, it's likely that both institutional and retail investors are raising funds to participate."

The U.S. Consumer Price Index (CPI) for May, which was a key focus for the market, recorded its first 4% reading in about three years, but the core CPI came in below expectations. According to the U.S. Bureau of Labor Statistics (BLS), the CPI for May rose 4.2% from the same month a year earlier.

This is the highest figure since April 2023 (4.9%) in three years and one month, but it matched the consensus forecast compiled by Dow Jones. On a month-over-month basis, the CPI rose 0.5%, also in line with expectations.

Core CPI rose 2.9% year-over-year and 0.2% month-over-month. The year-over-year increase matched expectations, while the month-over-month gain was lower than the Dow Jones consensus estimate of 0.3%.

Chris Zaccarelli of Northlight Asset Management analyzed that there is a possibility the war with Iran could end and the Strait of Hormuz could normalize by the end of the year. In such a case, inflation would gradually decline, and the Federal Reserve could hold off on raising interest rates. However, he added, "If the current situation persists, all forecasts will be off the mark."

Meanwhile, on the New York Commodity Exchange (COMEX), U.S. gold futures for August fell 3.7% to close at $4,128.60. Spot gold dropped 3.6% to $4,107.20 per ounce.

Bob Haberkorn, senior market strategist at RJO Futures, said, "Traders are somewhat nervous about the current market situation," adding, "The overall market is in risk-off mode, and the current decline in gold prices is a direct result of this risk-off sentiment."

The yield on the 10-year U.S. Treasury note rose 2.7 basis points (1bp = 0.01 percentage point) to 4.556% from the previous session. The 30-year Treasury yield rose 1.9 basis points to 5.030%.

This content was produced with the assistance of AI translation services.