- The Dow Jones Industrial Average fell 138 points, the S&P 500 dropped 0.79%, and the Nasdaq Composite lost 1.55%, led by a 4.8% plunge in the PHLX Semiconductor Index.
- Brent crude jumped 9.6% to $83.30 a barrel after President Trump reimposed a shipping blockade on Iran; confirmed traffic through the Strait of Hormuz fell by more than half over the weekend.
- Fed Governor Christopher Waller said a rate increase should be on the table if upcoming inflation data shows price pressures remaining firm, according to The Wall Street Journal.
- Bank earnings from JPMorgan Chase, Goldman Sachs, Bank of America, Wells Fargo and Citigroup are due Tuesday alongside the June consumer-price index and Fed Chairman Kevin Warsh’s testimony to the House Financial Services Committee.
Fed’s Waller says rate increase possible if inflation persists
U.S. stocks fell Monday as a selloff in chip shares and a jump in oil prices weighed on markets, according to The Wall Street Journal. The Dow Jones Industrial Average declined 138.37 points, or 0.26%, to 52,498.64. The S&P 500 fell 60.05 points, or 0.79%, to 7,515.34. The Nasdaq Composite dropped 408.43 points, or 1.55%, to 25,873.18.
Technology stocks led the declines. The PHLX Semiconductor Index lost 4.8%. Chipmakers fell after shares of SK Hynix and Samsung Electronics dropped sharply in South Korea, dragging the Kospi nearly 9% lower. In the U.S., Micron fell 4.4%, Intel declined 6.1%, and Sandisk tumbled 13%. Marvell and AMD also traded lower, the Journal reported. SpaceX shares fell about 4.2% to $139.14, nearing their initial public offering price of $135.
Brent crude rose 9.6% to $83.30 a barrel. The move followed President Trump’s reimposition of a shipping blockade on Iran and a statement that the U.S. would charge 20% of each cargo’s value as compensation for guaranteeing safe passage through the Strait of Hormuz, according to the Journal. Iran said it would not allow the U.S. to interfere in the management of the waterway. U.S. forces carried out fresh strikes on Iranian targets, the Journal reported. Confirmed traffic through the strait fell by more than half over the weekend, according to ship-tracking firm Kpler, returning to levels seen before the preliminary peace deal. U.S. gasoline and diesel futures also rose, pushed higher by Ukraine’s intensifying air campaign against Russian refineries as well as the renewed Hormuz tensions.
OPEC cut its global oil demand growth forecast to 780,000 barrels a day from 970,000, though the projection remains far more optimistic than those of other forecasters. The International Energy Agency expects demand to decline by 1 million barrels a day this year, while the U.S. Energy Information Administration projects a contraction of 1.2 million barrels a day.
Fed Governor Christopher Waller said a rate increase should be on the table if this week’s inflation data shows price pressures remaining firm, according to the Journal. Waller said core inflation — which excludes volatile food and energy prices — has risen from 3% in December to 3.4% in May, and said the increase predated the Iran war’s energy shock. Markets are pricing in less than a 50% chance of a rate increase at the Fed’s July meeting. FRED data available at the article’s vintage showed headline CPI at 4.17% year-over-year.
Yields on U.S. Treasury bonds rose. The 10-year yield stood at 4.54%, according to verified FRED figures. The WSJ Dollar Index rose 0.27%. The euro was last seen at $1.14. Gold fell 2.6%, to $3,997.00 a troy ounce.
Meta Platforms fell 1.9% after the company said its massive AI data center in Louisiana had nearly doubled in projected cost to more than $50 billion, supersizing the project to 5 gigawatts of compute capacity. Taiwan Semiconductor’s June revenue jumped 68% from a year earlier, hitting a record and implying second-quarter revenue of $39.55 billion, slightly above analyst estimates. Its ADRs fell 2.9%. TSMC reports earnings on Thursday.
Bank earnings kick off Tuesday, with results from JPMorgan Chase, Goldman Sachs, Bank of America, Wells Fargo and Citigroup all due before the open. The consumer-price index for June is also due Tuesday. Fed Chairman Kevin Warsh is set to present a monetary-policy report to the House Financial Services Committee.