Macro update
Brent crude extends its decline as peace hopes improve the supply outlook: Further details of the interim US-Iran agreement suggest sanctions on Iranian oil exports could be eased and the Straits of Hormuz, which handles around one-fifth of global crude and LNG shipments, could eventually reopen, although the timing of a full recovery in flows remains uncertain.
Dow reaches a second consecutive record high as technology stocks retreat: The Dow Jones closed at a fresh record of 51,999, while the S&P 500 fell 0.57% and the Nasdaq declined 1.15%, pressured by a 5.7% drop in the Philadelphia Semiconductor Index as investors rotated into financial and industrial stocks.
Wall Street futures edge higher while European futures weaken: US equity futures traded modestly higher, whereas European futures slipped 0.2% as investors adopted a cautious stance ahead of Federal Reserve Chair Kevin Warsh’s first policy meeting, where rates are widely expected to remain at 3.50%-3.75%.
Dollar holds steady ahead of the Federal Reserve decision: Markets continue to debate whether Kevin Warsh will adopt a more dovish tone aligned with President Trump’s preferences or reinforce expectations for tighter policy, with traders currently pricing around a 43% chance of a 25-basis-point rate increase in December.
Nikkei advances as AI-related stocks lead gains: Japanese equities moved higher, supported by strength in artificial intelligence-linked shares, with chip equipment manufacturer Lasertec surging 13.7%, while Taiwan’s benchmark index fell 1% after a 1.7% decline in TSMC.
UK inflation remains broadly stable in May: Headline consumer price inflation was unchanged from the previous month, while core inflation accelerated but by less than economists had anticipated, offering some relief on underlying price pressures.