Key facts
- Global stocks fell 1.5% on Wednesday, with major U.S. indexes declining over 1.6%.
- U.S. inflation rose 4.2% year-over-year in May, meeting forecasts.
- Oil prices gained amid renewed U.S.-Iran tensions and threats from President Donald Trump.
- Technology and AI-related stocks continued to decline, impacting indexes like the Nasdaq and KOSPI.
- The CBOE volatility index rose to 22.22.
Global stocks and major U.S. indexes fell on Wednesday, pressured by renewed tensions between the United States and Iran and a continued selloff in technology stocks. The MSCI's global equities index dropped 1.5%, with the S&P 500 down 1.62%, the Nasdaq Composite down 1.98%, and the Dow Jones Industrial Average down 1.87%.
Oil prices, however, extended their gains as hopes for Middle East peace dwindled following exchanges of strikes and threats between the U.S. and Iran. U.S. crude settled up 2.1% at $98.03 a barrel, and Brent crude settled up 1.8% at $93.10 per barrel.
U.S. inflation data showed the Consumer Price Index rose 4.2% in the 12 months through May, meeting forecasts but remaining elevated, particularly with rising energy prices. This data maintained expectations that the Federal Reserve would hold interest rates steady at its upcoming meeting, though some traders priced in a possibility of a rate hike later in the year.
Technology and AI-related stocks continued to face pressure, contributing to the declines in the Nasdaq and other indexes. The tech-heavy South Korean KOSPI fell 4.5%. The CBOE volatility index, a measure of market fear, rose to 22.22.
In currency markets, the dollar index was near flat, while the euro dipped slightly against the dollar. The dollar strengthened against the Japanese yen, nearing a level that could trigger potential intervention. U.S. Treasury yields saw modest increases across the curve.
Spot gold prices fell 4.32% to $4,078.49 an ounce amid the Middle East uncertainty and inflation data.