Stock Market Update

Equity futures point to a lower opening this morning as an escalation of hostilities between the U.S. and Iran sends oil prices higher as the market awaits key inflation data.

Stocks are coming off a choppy session that saw the major averages finish mostly lower following a sharp selloff across tech names, with the retreat lacking a news catalyst. Solid rotation into the broader market helped limit losses at the index level.

The market is poised for broadly lower opening levels this morning as higher oil prices and renewed geopolitical concerns weigh on sentiment. President Trump said on Truth Social that Iran "has taken too long to negotiate a deal that would have been great for them" and will now "have to pay the price," before telling Fox News that he is "close to ordering new strikes against Iranian power plants and bridges." Crude oil is currently up $1.74 (+2.0%) to $89.94 per barrel.

On the data front, investors are eagerly awaiting the 8:30 a.m. ET release of the May CPI report (Briefing.com consensus 0.5%), which analysts fear will likely show the index cross 4% on a year-over-year basis for the first time since 2023.

The MBA Mortgage Applications Index for the week ended June 6 increased 10.8%, from a prior decrease of 2.3%.

In corporate news:

• Alphabet (GOOG 357.96, -4.33, -1.19) has agreed to backstop $35 billion in lease payments for Anthropic, according to Bloomberg.
• Super Micro Computer (SMCI 35.85, -4.79, -11.8%) announced a proposed $7 billion of equity and equity-linked financing transactions to fund AI orders.
• Taiwan Semiconductor Manufacturing (TSM 411.88, -16.04, -3.8%) reported May revenues rose 30.1% year-over-year.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region had a mostly lower showing on Wednesday with South Korea's Kospi (-4.5%) sliding toward its low from Friday. Japan's Nikkei: -1.9%, Hong Kong's Hang Seng: -0.6%, China's Shanghai Composite: -0.4%, India's Sensex: +0.1%, South Korea's Kospi: -4.5%, Australia's ASX All Ordinaries: +0.4%.

In news:

• Japan's Ministry of Finance sold 30-yr JGBs to weak demand, but the cash market held up well despite the poor sale.
• Japan's largest banks plan to launch live stablecoin transactions in fiscal 2026/27.
• There was some ongoing focus on China's reported plan to spend nearly $300 bln on building data centers over the next five years.
• Taiwan Semiconductor Manufacturing reported a 30% yr/yr increase in its revenue for May.

Major European indices trade in the red with some caution ahead of the 8:30 ET release of the U.S. CPI report for May, which could show an acceleration in the year-over-year inflation rate. STOXX Europe 600: -0.5%, Germany's DAX: -0.8%, U.K.'s FTSE 100: -0.5%, France's CAC 40: -0.5%, Italy's FTSE MIB: -0.3%, Spain's IBEX 35: -0.5%.

In news:

• Today's data flow was on the light side, but there was also a report from the German Institute of Economic Research that the domestic economy is expected to contract in Q2 and Q3.

In economic data:

• Italy's April Industrial Production 0.5% m/m (expected 0.0%; last 0.6%); 1.3% yr/yr (last 1.4%)