Key facts
- Wall Street indexes opened lower on Wednesday.
- Technology stocks continued to sell off.
- Renewed tensions between the U.S. and Iran are a key market driver.
- A tame May inflation reading was released.
- The European Central Bank is expected to raise interest rates by 25 basis points.
- STMicroelectronics shares rose 1.6% after a 'buy' upgrade from BofA Global Research.
Wall Street's main indexes opened lower on Wednesday, as a selloff in technology stocks continued and renewed tensions between the U.S. and Iran overshadowed a tame May inflation reading. The Dow Jones Industrial Average fell 112.0 points, or 0.22%, to 50,760.12. The S&P 500 fell 36.1 points, or 0.49%, to 7,350.54, while the Nasdaq Composite dropped 166.8 points, or 0.65%, to 25,512.069 at the opening bell.
European shares held steady as investors balanced hopes for Middle East peace with renewed tensions, while awaiting the European Central Bank's monetary policy decision. Crude oil prices hovered near $90 a barrel following hostilities between the U.S. and Iran. Traders focused on remarks by U.S. President Donald Trump suggesting a deal to reopen the Strait of Hormuz was close. Mohit Kumar, chief financial economist for Europe at Jefferies, expressed optimism for a deal, noting that neither the U.S. nor Iran desires a full-scale war.
The pan-European STOXX 600 index remained nearly flat. The ECB's meeting is expected to result in a 25 basis point interest rate hike to combat rising energy costs, with particular attention on the outlook for monetary policy. A U.S. inflation report later in the day could also provide insights into the Federal Reserve's path.
STMicroelectronics gained 1.6% after a 'buy' upgrade, while Infineon added 1%. The broader tech sector, however, slipped 0.9%, extending recent losses. Italy's main index saw the most gains regionally, led by Banco BPM, as rivals Intesa Sanpaolo and BPM vied for Monte dei Paschi di Siena. Norway's Kongsberg experienced volatility after announcing long-term revenue targets.