After a sharp selloff in the previous session, US stock futures indicated another weak start in Wednesday’s trade on June 10, as the sell-off in chip stocks continued to weigh on the markets. The recovery in crude oil prices following escalating tensions in the Middle East also threatened to undermine hopes of a peace agreement.
Tech-heavy Nasdaq 100 futures slid 1.3%, a day after another bout of sharp volatility in high-flying chipmakers in less than a week. Futures tied to the S&P 500 and Dow Jones Industrial Average also declined 0.9% and 0.8%, respectively.
In the previous session, the Nasdaq closed 1% lower as chip stocks witnessed heavy selling, with several counters posting double-digit losses, while renewed tensions in the Middle East also dragged equities lower.
US President Donald Trump wrote on Wednesday morning that Iran had “taken too long to negotiate a deal that would have been great for them; now they will have to pay the price!!!”
Tensions in the Middle East resurfaced after the United States reportedly launched strikes against Iran on Tuesday, following claims by Trump that Tehran had shot down a US Apache helicopter in the Strait of Hormuz.
The strikes came just a day after Trump stated that a US-Iran peace deal was in its “final throes.” The fresh attacks have weakened hopes that the blockade of the Strait of Hormuz could be lifted anytime soon.
Even as tensions remained elevated in West Asia, the earlier rally in chip stocks had powered Wall Street indices to multiple record highs, prompting investors to reassess whether the rally had advanced too far, too fast, resulting in sharp profit booking.
The macroeconomic setup also remained unfavourable for equities, as markets braced for inflation readings that are expected to hit their highest level in more than three years, keeping sentiment cautious.
The US Consumer Price Index (CPI) data is due on Wednesday, and the Producer Price Index (PPI) data is scheduled for Thursday for further clues on the Federal Reserve’s interest rate trajectory.
Economists surveyed by Bloomberg expect annual inflation to accelerate to 4.2% in May, the highest since April 2023, compared with 3.8% a month earlier. Core inflation, which excludes food and energy, is projected to edge up to 2.9% from 2.8%.
Earlier, the US jobs report for May came in stronger than expected, fuelling expectations that the Federal Reserve could raise interest rates again by the end of the year. The robust jobs data came at a time when inflation remains well above the Federal Reserve’s target.
“Despite the near-term volatility, many market participants continue to view the broader pullback as a consolidation rather than a reversal of the AI theme. However, with geopolitical risks rising, inflation concerns resurfacing, and interest-rate expectations shifting, markets may remain choppy in the weeks ahead,” said domestic brokerage firm Vested Finance.
Crude oil prices rebound
Reacting to the latest attacks, crude oil prices rebounded in trade, recouping part of Tuesday’s sharp losses. Brent crude futures recovered nearly $2 per barrel to hit an intraday high of $93.26, while WTI crude futures rose $1.8 to $90 per barrel.
In the previous session, Brent crude had plunged 3%, while WTI crude futures declined nearly 3.4% to an intraday low of $86 per barrel, the weakest level since April 17, when Iran briefly stated that the vital Strait of Hormuz shipping route was fully open.
The sharp decline came after China’s crude imports reportedly dropped to around 7.8 million barrels per day last month, marking the lowest level in more than eight years and nearly 4 million barrels per day below the 2025 average.
US stocks in focus today
Chip stocks continued to bleed, with Micron Technology, AMD, and Broadcom trading lower in pre-market trade. The semiconductor pack has now declined in four of the last five sessions.
Meanwhile, Cracker Barrel Old Country Store gained 10% after the company’s fiscal third-quarter results beat Street estimates. The shares of Oracle fell 3.4% ahead of its Q4 earnings announcement, while Broadcom was also down 3% in pre-market trade.
Super Micro Computer slid more than 8% in pre-market trading after the company announced plans to raise $7 billion through equity-related sales to help fund new hardware purchases.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
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