Wall Street Rallies, Semiconductors Surge as Oil Retreats Amid Supply Gains
Market Overview and Key Developments
By Stephen Culp
NEW YORK, July 6 (Reuters) - Wall Street advanced on Monday as a rebound in semiconductors put the Nasdaq on top. Meanwhile, an anticipated post-war supply surge weighed on crude prices.
I will go into more detail on today's market moves below. 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.
Recommended Reading
- U.S. services sector loses some momentum, but employment rebounds
- Microsoft to eliminate 4,800 jobs, about 2.1% of global workforce
- Broadcom said it would expand its partnership with Apple through 2031 to develop and provide custom chips
- South Korean chipmaker SK Hynix launched a U.S. share sale to raise about $28 billion as it capitalizes on AI boom
- German industrial orders rose more than expected in May as fears of supply chain disruption abate
- Lockheed Martin will buy naval defense company Ultra Maritime from private equity firm Advent for $3.45 billion as global demand for military technology surges
Today's Key Market Moves
Stocks and Indices
• STOCKS: Wall Street advanced, with the tech-laden Nasdaq enjoying the steepest percentage gain; Europe's STOXX 600 pulled back from a record high
Sectors and Shares
• SECTORS/SHARES: Chips outperformed, with AMD, Qualcomm, and Taiwan Semiconductor, all gaining more than 4%. Real estate, housing stocks and homebuilders were among the laggards
Currency and Bonds
• FX: The dollar was essentially unchanged, while the yen drifted near the intervention zone, keeping investors wary
• BONDS: U.S. Treasury yields were little changed after Thursday's soft employment report reduced rate hike expectations
Commodities and Metals
• COMMODITIES/METALS: Front-month WTI and Brent crude futures both settled down 0.2%. Gold pulled back from a two-week high
Today's Talking Points
Geopolitical Events
Iran Funeral Processions
* Huge crowds flood Tehran's streets for slain Ayatollah's funeral procession
The Islamic Republic of Iran is staging a week of mass funeral ceremonies for slain Supreme Leader Ayatollah Ali Khamenei, who was killed alongside several members of his family in an airstrike shortly after war was declared by the United States and Israel on February 28.
While Iranian President Masoud Pezeshkian was seen walking with mourners on the streets of Tehran, so far there have been no public sightings of Mojtaba Khamenei, the son who succeeded Khamenei and was injured in the attack that killed his father.
Euro Zone Recession Risks
* ESM sees elevated euro zone recession risk arising from Middle East tension, potential U.S. asset selloff
A renewed Middle East conflict and a U.S. asset selloff are the two biggest risks to the euro zone, which, if twinned, could tip the euro area into recession and send inflation up near 5%, according to the European Stability Mechanism.
The Iran war and the energy crisis stoked by closure of the Strait of Hormuz, a vital shipping lane, have had a major impact on the global economy and rattled financial markets.
"Rising political uncertainty, longer-run fiscal sustainability concerns, and stretched equity valuations built on artificial intelligence-related earnings expectations create the potential for a sudden asset price correction emanating from the U.S.," ESM's report said.
China Missile Test
* China test fires a missile into Pacific, alarming regional powers
China's military test-fired a missile from a nuclear-powered submarine into the Pacific, according to the official Xinhua news agency, a move which drew sharp criticism from Japan, Australia, New Zealand and Taiwan.
Xinhua did not specify what type of missile China launched, but state-controlled newspaper the Global Times, citing a military expert, said it was likely to have been the JL-3, China's most advanced submarine-launched missile, which debuted at a military parade last year.
The JL-3 is capable of reaching the continental United States from Chinese coastal waters, according to a report from the Pentagon.
What Could Move Markets Tomorrow?
- Developments in the Middle East
- Social media posts from Trump
- Federal Reserve Chair Kevin Warsh testifies before House Financial Services Committee
- U.S. trade balance (May)
- France trade balance (May)
- Germany, Finland, Norway, Denmark industrial output (May)
- Netherlands, Estonia, Hungary, Czech Republic CPI (June)
- Potential yen intervention
Newsletter and Disclaimer
Want to receive Trading Day in your inbox every weekday morning? Sign up for my newsletter here.
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.