Daily summary: Tech sector holds valuations despite risk

USA

• US indices are mixed. The Dow Jones is down about 0.3%, the S&P 500 is hovering near the open, and the Nasdaq 100 is slightly higher. Gains are concentrated mainly in technology and energy, while consumer stocks are lagging.
• The Middle East remains the main source of volatility. The US carried out strikes on Iranian military targets, Iran responded by attacking a US base, and Iranian media report that indirect talks with the US have been suspended. The market is again pricing in risk to shipping through the Persian Gulf. Late in the day, Donald Trump said that Israel and Hezbollah are expected to halt operations.
• Nvidia unveiled a new chip for personal computers intended to bring AI capabilities directly to laptops and desktop computers. The news supports sentiment toward tech stocks, especially the AI segment.
• Anthropic has confidentially filed documents for a US IPO.
• Hewlett Packard Enterprise is rising ahead of its Q2 results. Shares were up about 5%, hitting a new all-time high amid continued optimism about demand for AI servers.
• Comments from Nvidia’s CEO about smaller-than-expected disruptions for software companies are supporting SaaS stocks on both sides of the Atlantic.
• Macroeconomic data
  • The US ISM Manufacturing Index rose in May to 54.0 from 52.7, the highest level since May 2022. The reading came in above market expectations.
  • New orders increased to 56.8, but the prices index remains very high at 82.1. The data confirm both improving activity and the risk that inflationary pressure becomes entrenched.

Europe

• European indices ended the session lower. The STOXX 600 fell about 0.8% as tensions in the Middle East flared up again.
• The Head of Ukraine’s Presidential Office, Kyrylo Budanov, said that a ceasefire “by winter” is “realistic.”
• Macroeconomic data
  • Eurozone manufacturing PMI data showed the improvement is slowing. The index fell to 51.6 from 52.2, although it remained above the 50 threshold.

Forex

• The dollar is gaining against major currencies. The dollar index is up about 0.3%, EURUSD is down toward 1.16, and USDJPY is nearing 160. FX markets are reacting to a combination of geopolitical tensions, rising oil prices, and higher bond yields.

Commodities

• Brent crude is up about 4%, to around $95 per barrel. The market is again pricing in the risk of further disruptions in the Persian Gulf and difficulties fully reopening transport routes through the region.
• Gold is falling despite rising geopolitical risk. Spot prices are down about 1.9% to $4,451 per ounce, as a stronger dollar and higher yields reduce the metal’s appeal.

Crypto

• The cryptocurrency market remains weaker than equities. Bitcoin started June around $73,000 amid ETF outflows and rising geopolitical uncertainty. Ethereum is down about 2%.
• Sentiment toward crypto was worsened by Strategy selling 35 Bitcoins.