Wall Street Retreats from Record Highs, Focus on Fed and Iran-US Risks
US stock indexes retreated slightly from record highs on Wednesday, as the market assessed the risk of the Fed remaining hawkish and the lack of progress on a deal between Iran and the US. The S&P 500, Nasdaq 100, and Dow all moved lower, with sentiment overshadowed by a combination of solid jobs data and renewed geopolitical tensions.
ADP data showed the private sector added a net 122,000 jobs in May, beating expectations. This figure reinforces the view that the labor market remains strong, giving the Fed room to maintain tighter policy for longer to curb inflation, while also pushing yields higher.
On the geopolitical front, Iran's latest attacks on Bahrain and Kuwait added pressure on the US-Iran ceasefire, while energy prices rose again. The energy rally heightened inflation concerns and reinforced the "higher for longer" argument, which tends to depress risky asset valuations when the cost of capital rises.
At the sector level, financial stocks weakened as yields rose, with JPMorgan down 1%. Several hyperscaler stocks also fell, including Oracle, Nvidia, and Microsoft, each of which fell more than 1%, although the theme of AI infrastructure demand remains a key driver of the tech sector's narrative.
Meanwhile, Marvell surged 15%, extending gains after a 30% gain in the previous session, buoyed by comments from Nvidia CEO Jensen Huang that the semiconductor manufacturer has the potential to become a "trillion-dollar company." The market will be monitoring yield trends, energy price dynamics, and Fed policy signals, as these three are key variables in determining whether this correction continues or is simply a pause after a record-setting rally.
Source: Newsmaker.id
