In Monday's trading session, the three major U.S. stock indices closed with mixed results, as semiconductor stocks recovered some of their previous session's losses.
In U.S. markets, by the closing bell, the Dow Jones Industrial Average had declined by 80.77 points, or 0.16%, settling at 50,786.01. The Nasdaq Composite rose by 220.23 points, or 0.86%, to 25,929.66, while the S&P 500 gained 21.99 points, or 0.30%, to close at 7,405.73. Marvell Technology (MRVL.US) shares surged 9.6%, Intel (INTC.US) jumped 11%, and Micron Technology (MU.US) climbed nearly 10%. The Nasdaq Golden Dragon China Index closed down 0.6%, with Alibaba (BABA.US) shares falling almost 1%.
European markets showed a mixed picture. Germany's DAX 30 index fell 146.65 points, or 0.59%, to 24,627.07. The UK's FTSE 100 was down 1.85 points, or 0.02%, at 10,366.20. France's CAC 40 dropped 18.95 points, or 0.23%, to 8,199.29. The Euro Stoxx 50 inched up 2.28 points, or 0.04%, to 6,064.35. Spain's IBEX 35 declined by 121.18 points, or 0.66%, to 18,223.72, while Italy's FTSE MIB gained 287.45 points, or 0.58%, to 50,180.50.
In Asian markets, Japan's Nikkei 225 index fell 3.85%, South Korea's KOSPI dropped 8.29%, and India's Sensex index declined 0.97%.
The U.S. Dollar Index, which measures the greenback against a basket of six major currencies, dipped 0.03% to settle at 100.042. In late New York trading, one euro could buy $1.1528, up from $1.1523 previously. One pound sterling bought $1.3339, up from $1.3337. One U.S. dollar traded for 160.26 Japanese yen, up from 160.17; 0.7979 Swiss francs, up from 0.7962; 1.3956 Canadian dollars, up from 1.3949; and 9.4401 Swedish kronor, down from 9.4735.
In cryptocurrency markets, Bitcoin reclaimed ground above $63,000, trading at $63,540. Ethereum was at $1,696.81.
Oil prices moved higher. The July contract for West Texas Intermediate crude on the New York Mercantile Exchange rose 76 cents, or 0.84%, to settle at $91.30 per barrel. The August contract for Brent crude on the ICE Futures Europe exchange gained $1.16, or 1.25%, to close at $94.25 per barrel.
Spot gold edged up 0.04% to $4,329.83 per ounce, while spot silver was at $68.171 per ounce. Since hitting a record high in late January, the international gold price has been fluctuating in a downward trend. Entering June, the decline accelerated as expectations for Federal Reserve interest rate hikes intensified, nearly erasing all gains made this year. Notably, despite the ongoing price correction, global central banks' enthusiasm for purchasing gold has not waned, and gold's share in global official reserve assets continues to rise. Market analysts note that the surge in energy prices triggered by the U.S.-Israel-Iran conflict has not activated gold's traditional safe-haven function; instead, by pushing up inflation expectations, it has put pressure on gold prices. In the short term, a stronger U.S. dollar and rising Treasury yields increase the opportunity cost of holding gold, likely keeping prices subdued. However, over the medium to long term, factors such as continued gold purchases by global central banks, the restructuring of the international reserve system, and persistent safe-haven demand are expected to provide support for gold prices.
Key Economic Developments
A U.S. judge has blocked a Trump-era order imposing a $100,000 fee on H-1B visa applications. A federal judge overturned the measure, providing relief for U.S. tech companies reliant on hiring high-skilled foreign workers. U.S. District Judge Leo T. Sorokin in Massachusetts ruled that the executive order, which significantly increased the cost of applying for the popular work visa, constituted an illegal tax and must be rescinded. The U.S. government is expected to appeal the ruling.
Bank of America Securities has warned that a dense cluster of bear market signals is being triggered for U.S. stocks. The firm's strategists, led by Savita Subramanian, stated that investors should remain cautious, as an increasing number of bearish indicators suggest the market is nearing a top. In a report dated June 5th, the team noted that approximately 70% of their bear market signals have now been triggered, consistent with average levels seen during historical market peaks. Seventeen out of twenty valuation metrics for the S&P 500 show "statistically significant overvaluation," with eight of those metrics even higher than levels seen during the tech bubble era. Furthermore, high price-to-earnings stocks have significantly outperformed low valuation stocks, which strategists view as a sign of "excessive speculation." Within the technology sector, the performance gap between the top and bottom quintiles has widened to its highest level since February 2000. The strong performance of the S&P 500 "masks intense internal dispersion," with the return gap between the top 10% and bottom 10% of index constituents over the past three months reaching its highest level in the post-pandemic era. While fundamentals for some tech stocks remain healthy, Subramanian pointed out: "Cash flow conversion has stalled, investment-grade bond and equity supply has increased, the share of stock buybacks relative to market capitalization has declined, and capital expenditure as a percentage of operating cash flow for hyperscale cloud companies is projected to approach 100% by year-end, up from 40% in 2023."
Iran's ambassador to the United Nations has expressed hope for a U.S.-Iran agreement by the end of June. Amir Saeid Iravani stated on Monday that Iran and the U.S. are still working to advance peace agreement negotiations and expressed optimism that a final outcome could be reached "soon." When asked if an agreement was possible by the end of June, Iravani responded, "We hope so." Iravani also emphasized that the current ceasefire is comprehensive and applies to the entire region, including Lebanon, a claim that Israel disputes. Meanwhile, Israeli Prime Minister Benjamin Netanyahu stated that while Israel has decided not to take further action against Iran, it will continue strikes against Hezbollah forces in Lebanon.
Notable Company News
Apple (AAPL.US) unveiled its next-generation AI platform, which includes an upgraded, AI-powered version of Siri. Craig Federighi, Apple's senior vice president of Software Engineering, announced during the company's Worldwide Developers Conference (WWDC) keynote that the new "Apple Intelligence" system, powered by underlying technology from Google, will be better able to understand the context of user requests. This is a critical moment for Apple, as its initial AI platform launch two years ago saw many features roll out slowly or underperform compared to rivals. The comprehensive upgrade to Siri is central to Apple's AI resurgence plan; since its debut in 2011, Siri has lagged behind competitors in AI capabilities. Federighi stated the software update will focus on three areas: artificial intelligence, performance improvements, and security. For the Mac lineup, the next macOS will be named Golden Gate. Apple also made adjustments to the Liquid Glass design introduced last year, including a new slider feature that allows users to adjust the intensity of visual effects.
SpaceX's initial public offering (IPO) is reportedly significantly oversubscribed. According to informed sources, demand is heating up for what could be a record-breaking listing event. The lead underwriters for the offering are expected to stop accepting subscription applications from institutional investors after the New York market closes at 4 p.m. on Wednesday. Closing the book will give the banks time to assess demand and provide pricing recommendations to the company. The SpaceX IPO is expected to be priced on June 11th and begin trading the following day. The company plans to issue 555.6 million shares at a price of $135 per share, aiming to raise approximately $75 billion, which would value the company at around $1.8 trillion. After the Wednesday deadline, retail investors may still be able to submit orders for SpaceX stock on some platforms. Previous reports indicated the company may allocate up to 30% of the offering to retail investors.
The CEO of Vale SA (VALE.US), the world's largest iron ore producer, stated that global demand for metals has not been disrupted by the ongoing conflict. Gustavo Pimenta said there are no signs that the war has damaged demand for metals globally; in fact, the company's profit margins have widened since the Iran conflict disrupted raw material transportation. Pimenta noted that Vale is focused on unlocking value from its own assets rather than seeking acquisition opportunities. He added that global demand for critical minerals has been "extremely constructive" for the company. Disruptions to shipping through the Strait of Hormuz have pushed up fuel prices and freight rates, impacting miners like Vale, though these effects have been offset by rising prices and sales volumes. Vale has raised its full-year free cash flow forecast for its core iron ore business by $1.5 billion to reflect the benefits of higher iron ore prices since the outbreak of the Iran war. Vale now expects the average iron ore price this year to reach $112 per ton, up from a pre-conflict scenario forecast of $102 per ton.
OpenAI revealed on Monday that it has confidentially submitted paperwork for an initial public offering. In a statement, the company said: "We recently confidentially submitted an S-1 filing. We expect it to leak, so we are disclosing it directly. The timing of the IPO is not yet determined; it may take some time, as some things are easier to do as a private company. But this involves a complex set of trade-offs, and this filing gives us the option to go public more quickly when the time is right." OpenAI's statement indicates the company is seeking to capitalize on the artificial intelligence boom, as its rival Anthropic is also advancing its own listing process.
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