U.S. major indices continued their weekly decline on Tuesday. The yield on the 30-year U.S. Treasury note surpassed 5.19%, reaching its highest level since 2007, just before the financial crisis. Traders now assign a probability exceeding 80% to the Federal Reserve implementing a rate hike by the end of 2026.
In U.S. markets, the Dow Jones Industrial Average fell by 322.24 points, or 0.65%, to close at 49,363.88. The Nasdaq Composite dropped 220.02 points, or 0.84%, ending at 25,870.71. The S&P 500 declined by 49.39 points, or 0.67%, finishing at 7,353.66. Among notable stocks, Micron Technology (MU.US) rose 2.52%, while Nvidia (NVDA.US) fell 0.77%, Tesla (TSLA.US) dropped 1.43%, and SanDisk (SNDK.US) gained 3.77%.
In European markets, Germany's DAX 30 index increased by 139.69 points, or 0.58%, to 24,387.27. The UK's FTSE 100 index edged down 5.07 points, or 0.05%, to 10,318.68. France's CAC 40 index decreased by 5.73 points, or 0.07%, to 7,981.76. The Europe Stoxx 50 index fell 3.50 points, or 0.06%, to 5,845.50. Spain's IBEX 35 index dropped 99.89 points, or 0.56%, to 17,655.21. Italy's FTSE MIB index declined by 343.55 points, or 0.71%, to 48,325.50.
In Asian markets, Japan's Nikkei 225 index fell 0.44%, South Korea's KOSPI dropped 3.25%, India's Sensex index decreased 0.15%, and Singapore's Straits Times index rose 1.51%.
The U.S. Dollar Index, which measures the dollar against six major currencies, rose 0.14% to settle at 99.326. By the close of New York forex trading, one euro traded at $1.1604, down from $1.1637 the previous day. One British pound traded at $1.3397, down from $1.3411. One U.S. dollar bought 159.06 Japanese yen, up from 159.01, and 0.7892 Swiss francs, up from 0.7856. One U.S. dollar traded for 1.3750 Canadian dollars, up from 1.3749, and 9.4055 Swedish kronor, down from 9.4093.
In cryptocurrencies, Bitcoin hovered near $77,000, trading at $76,738.9. Ethereum fell over 1.3% to $2,135.74.
In the oil market, the price of light sweet crude for June delivery on the New York Mercantile Exchange fell 89 cents, or 0.82%, to settle at $107.77 per barrel. Brent crude for July delivery on the London ICE Futures Europe exchange dropped 82 cents, or 0.73%, to close at $111.28 per barrel.
In precious metals, spot gold fell below the $4,500 level to $4,480.62 per ounce. Spot silver traded at $73.702 per ounce.
On the macroeconomic front, former U.S. President Donald Trump stated that Iran has limited time and the U.S. might take action against it again. He mentioned that he was within an hour of ordering a strike before delaying it and that Iran's leaders are seeking a deal, but if none is reached, the U.S. could act again within days, citing concerns over nuclear weapons.
U.S. pending home sales rose for the third consecutive month in April, indicating strong potential demand at the start of the spring selling season. The Pending Home Sales Index increased 1.4% to 74.8, a five-month high. The report noted the housing market is gradually improving as affordability slowly recovers, though low-income buyers still face challenges from high mortgage rates and listing prices.
The U.S. Securities and Exchange Commission (SEC) proposed two new rules aimed at making it easier for companies to conduct initial public offerings (IPOs). Described as the largest reform to IPO rules in 20 years, the measures are part of efforts to revitalize the IPO market. The new rules would ease financing mechanisms and relax disclosure requirements, particularly for smaller firms, while giving larger companies a transition period before stricter standards apply.
Kevin Warsh, poised to become the next Federal Reserve Chair, has sold most of the financial assets he pledged to divest before taking office. Recent government filings show he has disposed of investments worth at least $100 million, a key step to address controversy during his nomination. However, the filings omitted two assets, each valued between $250,000 and $500,000, that he had also promised to sell. His disclosed assets are at least $192 million, though his actual wealth is believed to be higher.
Negotiations between Samsung Electronics and its South Korean union lasted 15 hours on Tuesday without a resolution, with talks set to resume Wednesday. Both sides are working towards an agreement to avoid a potentially disruptive and prolonged strike. The main point of contention remains unresolved. The union plans to hold an 18-day strike starting Thursday if no deal is reached.
On the corporate front, Google (GOOG.US, GOOGL.US) significantly reduced prices for its AI models to compete with OpenAI and Anthropic. At its I/O developer conference, Google introduced lower-priced tiers and enhanced tools for developers and enterprise clients. It launched a new $100-per-month AI Ultra entry-level subscription and cut the price of its high-end AI Ultra subscription from $250 to $200 per month. Google's CEO stated the company aims to offer much of the high-end security and programming capabilities at a lower cost.
Apple (AAPL.US) is undergoing a major executive reshuffle in its hardware division under new leadership. Chief Hardware Officer Johny Srouji is restructuring the hardware development organization to accelerate the development of future devices. The management of the product design team is being shifted, with oversight moving from Kate Bergeron to her deputies Shelly Goldberg, Dave Pakula, and Richard Dinh. The reorganization also involves changes in responsibility for product reliability, custom silicon engineering, and advanced technology groups, with several executives taking on new or expanded roles.
Comments