On June 10, the Dow Jones Industrial Average closed down 953.33 points, or 1.87%, at 49,918.78. The S&P 500 dropped 119.66 points, or 1.62%, to finish at 7,266.99, while the tech-heavy Nasdaq Composite fell 509.32 points, or 1.98%, to close at 25,169.50.
This marked the first time in three weeks that the New York Stock Exchange experienced two consecutive days of declines, driven by ongoing concerns over the overvaluation of AI-related stocks and negative developments in the Middle East.
Stocks that had previously led the market rally, particularly in the semiconductor and AI sectors, saw significant declines. Nvidia, a leading AI company, fell 3.4%, while Micron Technology dropped 4.7%. The Philadelphia Semiconductor Index decreased by 3.6%.
Notably, Supermicro Computer (SMCI), an AI server manufacturer, plummeted 23.1% after announcing a plan to issue $7 billion in stock to finance component purchases.
The unrest in the Middle East further dampened investor sentiment. President Donald Trump warned on Truth Social about the need for the U.S. to respond to hostilities with Iran, stating that there would be a 'price to pay' and indicating a willingness to escalate military action against Iran.
Iranian President Ebrahim Raisi also announced a strong retaliatory stance, heightening fears of conflict between the two nations.
As a result, international oil prices rose. August Brent crude futures increased by 1.80% to $93.10 per barrel, while July West Texas Intermediate (WTI) crude futures rose by 2.07% to $90.03.
Jedd Allbrook, a portfolio manager at Agent Capital Management, told CNBC, "The Iran war issue is a very significant variable for the market. If President Trump can control the situation and negotiate with Iran, the Strait of Hormuz could reopen, but if not, oil prices are bound to rise significantly."
Additionally, the U.S. Consumer Price Index (CPI) for May, released that morning, raised inflation concerns among investors.
The May CPI rose 4.2% compared to the same month last year, marking the largest increase in three years. Excluding volatile food and energy prices, the core CPI increased by 0.2% from the previous month and 2.9% year-over-year, aligning with market expectations. However, rising oil prices raised worries about prolonged inflationary pressures.
Market analysts suggest that the Federal Reserve may raise interest rates at least once by the end of the year, reflecting this sentiment in asset prices.
In the bond market, long-term inflation concerns were evident. The yield on the 10-year U.S. Treasury rose by 3 basis points to 4.55%. In contrast, the yield on the more sensitive 2-year Treasury dipped slightly to 4.12%.
Gold, considered a safe-haven asset, also weakened. The spot price of gold fell 4.3% to $4,077.91 per ounce, as rising oil prices and the potential for further interest rate hikes diminished the appeal of non-yielding gold investments.
* This article has been translated by AI.
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