ORLANDO, Florida, June 10 (Reuters) - Another heavy selloff
in tech dragged U.S. and global stocks lower on Wednesday, and
wider investor sentiment was rocked and oil prices rose sharply
after U.S. President Donald Trump threatened to hit Iran "very
hard".
In my column today, I look at how global trade seems to be
thriving, despite tariffs, trade wars, real wars and an energy
shock. There's a catch though - the headline numbers are being
inflated by rising prices more than volumes. How sustainable is
this?
If you have more time to read, here are a few articles I
recommend to help you make sense of what happened in markets
today.
1. U.S. consumer inflation breaks above 4% as Iran war
raises energy prices
2. Why the blockbuster SpaceX IPO may spell more bad news
for crypto
3. World markets walk a tightrope between AI stocks and oil
shocks
4. Stock-pay boom amplifies U.S. economic drumbeat: Mike
Dolan
5. Bank of Japan Governor Ueda hospitalized, will miss June
meeting
Today's Key Market Moves
* STOCKS: South Korea -5%, China and Japan -2%. Big three
U.S. indices down close to 2%.
* SECTORS/SHARES: Eight S&P 500 sectors fall, three rise.
Tech -2.3%, industrials -3.4%; consumer staples +1.7%. Super
Micro Computer -28%, Nvidia -3.8%. "SOX" chip index -3.6%.
* FX: USD/JPY up to 160.50, highest since April 30 when
Japan last intervened.
* BONDS: U.S. yields up slightly. 10-year auction draws very
strong demand, especially from indirect bidders, a proxy for
foreign central banks.
* COMMODITIES/METALS: Oil rebounds 2%, gold -4%.
Today's Talking Points
* Tech it down a notch
The AI frenzy is losing its luster, ironically just as the
world's biggest IPO is about to land. Or perhaps they're not
totally unconnected. Either way, AI and tech stocks are under
pressure and are dragging the broader indices down with them.
The "SOX" chip index has lost 13% in the last week, and the
Nasdaq has fallen five days out of the last six, its worst run
this year. The Nasdaq is also at its lowest daily close in over
a month, as is the S&P 500 tech index. SpaceX, come on down!
* Core relief?
Annual U.S. CPI inflation is now above 4%, more than double
the Fed's 2% target. It is expected to keep rising in the coming
months, tightening the squeeze on consumers and households - and
voters - as the November midterm elections come into view.
Was there anything positive in the numbers? Monthly core
inflation slowed to 0.2% from 0.4%, below consensus 0.3%. Core
goods inflation turned negative for the first time this year,
suggesting the tariff impulse is fading, and the oil spillover
into core remains limited. Grounds for optimism, or
straw-clutching wishful thinking?
* BOJ Governor
Bank of Japan Governor Kazuo Ueda was hospitalized on
Wednesday, and will miss the bank's policy meeting next week. It
is the first time a BOJ governor will miss a scheduled policy
meeting since the central bank began deciding policy under the
current arrangement in 1998.
The BOJ is expected to raise rates 25 bps to a
three-decade-high of 1.00%. From an FX perspective, a strong
commitment to more tightening might be needed to prevent the
weak yen from hitting multi-decade lows. But Ueda's absence
makes that communication difficult.
What could move markets tomorrow?
* Developments in the Middle East
* Turkey interest rate decision
* European Central Bank interest rate decision
* U.S. weekly jobless claims
* U.S. PPI inflation (May)
* U.S. Treasury sells $22 billion of 30-year bonds at
auction
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