MARKET SNAPSHOT
U.S. stocks snapped their winning streak on renewed tensions between the U.S. and Iran, while oil, Treasury yields and the dollar rose on the escalation. Gold and silver fell as the stronger dollar put pressure on the precious metals.
MARKET WRAPS
EQUITIES
The latest skirmish between the U.S. and Iran broke a long winning streak for stocks.
The Gulf kingdom of Kuwait came under a barrage of ballistic missiles and drones on Wednesday, as Iran launched its largest salvo of the near two-month ceasefire. The U.S. and Iran had exchanged heavy fire the evening before, but U.S. Central Command said Tuesday night that the tenuous truce was "ongoing."
The Dow Jones Industrial Average dropped 1.2%, the S&P 500 lost 0.7% and the Nasdaq declined 0.9%.
Most equity markets across Asia rose after new developments in artificial intelligence lifted the S&P 500 to a ninth straight day of gains.
Japan's Nikkei Stock Average closed 2.5% higher at a record, breaking past the 68000 level for the first time. Chip-related stocks led gains, with Tokyo Electron rising 13% and Screen Holdings climbing 18%.
Taiwan's benchmark Taiex closed 2.0% higher. Singapore's FTSE Straits Times Index added 0.8%, after hitting a record intraday peak.
Chinese indexes also gained, with the Shanghai Composite closing 0.2% higher and the Shenzhen Composite up 0.3%. The tech-heavy ChiNext Price Index ended the session 1.65% higher after notching a fresh intraday high.
Hong Kong's Hang Seng Index fell 1.6%, weighed by healthcare and educational-services sectors, while the tech gauge dropped 2.7%.
South Korea's markets were closed for a public holiday.
Australia's S&P/ASX 200 Benchmark Index fell 0.1%, while New Zealand's S&P/NZX 50 Index dropped 0.6%.
COMMODITIES
Crude futures rose for a third consecutive session as a renewed exchange of fire between the U.S. and Iran raised tensions and concerns that oil will be shut in for longer.
"If the violence in the Middle East continues to increase and the timeline on a ceasefire agreement continues to expand further into the future, then eventually the market is going to trade through $100 sooner rather than later," Mizuho's Robert Yawger said. "Every day the Strait of Hormuz is shut in, 11 million to 14 million bpd of oil fails to make it to market, and barrels are taken out of storage someplace else to compensate."
WTI rose 2.4% to $96.02 a barrel and Brent rose 1.9% to $97.81.
The U.S. dollar has been getting stronger over the past month, with that trend continuing to put pressure on precious metals futures.
Gold is maintaining a "bearish lean," said StoneX, chopping around the $4,000 to $4,500 a troy ounce range while the market doesn't react much to the continued appetite for gold from international central banks.
"Market remains range-bound with no confirmed directional edge," said the firm.
Front-month gold settled down 1.2% to $4,436.70/oz, while front-month silver fell 2.4% to $73.476/oz.
TODAY'S TOP HEADLINES
Logan: Fed May Need to Hike Interest Rates This Year to Confront Inflation
Rate hikes might be required later this year to tamp down stubborn inflation, Dallas Fed President Lorie Logan said, one of the most direct warnings yet from a U.S. central banker that the Federal Reserve may need to tighten monetary policy.
In a Wednesday afternoon speech in El Paso, Texas, Logan said that the Fed's current interest rate setting, 3.5% to 3.75%, no longer appears to be constraining rising prices. With a broad range of indicators showing that inflation has heated up, the Fed might need to respond with higher rates before the end of 2026, Logan said.
"I am increasingly concerned that higher interest rates could be necessary later this year to fully restore price stability," Logan said, according to a published text of her remarks.
U.S.-Iran Skirmish Spurs Deadly Drone Attack on Kuwait Airport
The Gulf kingdom of Kuwait came under a barrage of ballistic missiles and drones on Wednesday that shut its international airport, killed one person and injured dozens more, as Iran launched its largest salvo of the near two-month ceasefire.
The U.S. and Iran had exchanged heavy fire the evening before, after the U.S. struck an empty oil tanker it said was attempting to breach its blockade. That set off a string of attacks by both sides, with Iran firing ballistic missiles at U.S. bases in Kuwait and Bahrain.
Kuwait said it had dealt with 13 ballistic missiles, 17 drones and that civilian infrastructure and diplomatic missions had been damaged during an attack it said began at dawn local time Wednesday.
Energy Costs Continue to Feed Inflation, Fed's Beige Book Shows
U.S. businesses endured another month of energy-driven price increases and economic uncertainty in the third month of the Iran conflict, according to a recent survey from the Federal Reserve.
Businesses started this year on a steady yet cautious footing, but higher energy prices tied to the tensions in Iran have worsened consumers' future view of inflation and driven consumer sentiment to record lows since the conflict began in late February.
While many higher-income households remained resilient and less sensitive to these increases, the report showed lower-income consumers experienced greater financial strain, consistent with the notion of a K-shaped economy.
U.S. Proposes New Tariffs on China, EU Over Forced Labor
The U.S. is proposing new tariffs of at least 10% on many of its trading partners over an alleged failure to address forced labor concerns, the Trump administration's latest move to replace levies that were struck down by the Supreme Court earlier this year.
The Office of the U.S. Trade Representative said late Tuesday that goods from the European Union, U.K. and more than a dozen other economies would face a new, 10% duty after an investigation found they hadn't done enough to block imports of goods made from forced labor.
Other countries, including China, Japan and India, would face a 12.5% rate because they don't prohibit such imports and haven't committed to do so through a deal with the Trump administration, the USTR said.
Broadcom Revenue Climbs on AI Chip Demand
Broadcom logged higher revenue in its latest quarter driven by demand for its artificial-intelligence chips.
The semiconductor and software maker on Wednesday posted a second-quarter profit of $9.31 billion, or $1.91 a share, compared with $4.97 billion, or $1.03 a share, a year earlier.
Adjusted earnings per share were $2.44, compared with estimates of $2.40 a share according to analysts polled by FactSet.
Bill Ackman's Pershing Square Set To Make $600 Million on Universal Stake
Bill Ackman is set to make hundreds of millions of dollars on his investment in Universal Music Group despite two unsuccessful attempts to clinch deals with the company.
The billionaire's hedge-fund firm, Pershing Square, is selling its remaining stake in Universal after the world's largest music company rebuffed its recent takeover offer. That stake amounts to around 80.6 million Universal shares, worth well over $1.5 billion, according to a sales document released by Bank of America that was viewed by The Wall Street Journal.
All in, Pershing Square expects to reap at least $600 million in profits, including dividends, on the nearly five-year investment, according to a person familiar with the matter.
Expected Major Events for Thursday
00:30/SIN: May Singapore Whole Economy PMI
01:30/AUS: Apr International Trade in Goods & Services
02:00/JPN: May Imported Vehicle Sales
23:00/SKA: Apr Balance of payments
23:30/JPN: Apr Provisional Labour Survey - Earnings, Employment & Hours Worked
23:30/JPN: Apr Household Spending
23:50/JPN: May Provisional Trade Statistics for 1st 20 days of Month
23:50/JPN: May International Reserves / Foreign Currency
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
June 03, 2026 16:49 ET (20:49 GMT)
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