- Stocks Slide on Mideast Tension, Fed’s Warning: Markets Wrap
Equities fell as the US weighs the potential for direct conflict with Iran, and Federal Reserve Chair Jerome Powell
warned of meaningful inflation ahead. MSCI’s regional gauge of shares slumped about 1%, with stocks in Hong
Kong falling more than 2%. US equity futures edged lower after the S&P 500 Index closed little changed in the
previous session. The dollar was stronger against most major currencies. Cash trading in Treasuries is closed
Thursday for a US holiday. Sentiment turned more cautious following a Bloomberg report that senior US
officials are preparing for a possible strike on Iran in the coming days. Markets were already on edge after the
Fed downgraded its estimates for growth this year and projected higher inflation, underscoring how tariff
driven uncertainties are complicating the central bank’s bid to ease policy. - Dow posts narrow loss after Fed signals it’s in no hurry to cut rates
The Dow Jones Industrial Average ended Wednesday modestly lower following the Federal Reserve’s latest
policy update, where the central bank kept interest rates steady and Chair Jerome Powell signaled it would
wait to see the impact of President Donald Trump’s tariffs on inflation before proceeding on rates. The 30
stock Dow lost 44.14 points, or 0.10%, and ended at 42,171.66. The S&P 500 slipped 0.03% to close at 5,980.87,
and the Nasdaq Composite inched up 0.13% to settle at 19,546.27. - Oil prices steady after Trump says Iran wants to negotiate
Crude oil futures were little changed on Wednesday, after President Donald Trump said Iran wants to negotiate
over its nuclear program in the wake of six days of Israeli airstrikes. U.S. crude oil futures rose 30 cents, or 0.4%,
to close at $75.14 a barrel, while global benchmark Brent gained 25 cents, or 0.25%, to settle at $76.70 per
barrel. Prices had jumped more than 4% on Tuesday after Trump called for Iran’s unconditional surrender. The
president told reporters outside the White House Wednesday that the Iranians had reached out to him and
suggested that they send a delegation to the White House to negotiate. “They want to negotiate,” Trump said.
“They even suggested that they come to the White House. That’s courageous. It’s like not easy for them to do.”
Trump confirmed Wednesday that he was considering a military strike against Iran’s nuclear facilities, though
he indicated that no final decision had been made on whether to attack. “I may do it, I may not do it, I mean
nobody knows what I’m going to do,” Trump told reporters. The president said it wasn’t too late to reach a
negotiated settlement: “Nothing is too late,” he told reporters. Trump’s comments Wednesday seemed like a
shift in tone from his threats against Iran a day ago on his social media platform Truth Social. The president on
Tuesday threatened Iran’s supreme leader, Ayatollah Ali Khamenei, warning him that he is an “easy target”
and U.S. patience was wearing thin. Khamenei was defiant Wednesday, warning the U.S. of “irreparable
damage” if it joined Israel’s air campaign. Oil prices have gained about 10% since Israel launched its campaign
against Iran last Friday. - Gold edges higher as Fed leaves rates unchanged, platinum hits more than 4-year high
Gold prices edged higher on Wednesday after the Federal Reserve left interest rates unchanged, while
platinum surged to a more than four-year peak. Spot gold added 0.1% to $3,392.08 an ounce. U.S. gold
futures rose less than 0.2% to $3,412.5. Markets are trading sideways right now as everyone is waiting for Fed’s
decision and the developments in the Middle East, Marex analyst Edward Meir said. In the Middle East, Iran’s
Supreme Leader Ayatollah Ali Khamenei rejected U.S. President Donald Trump’s demand for unconditional
surrender, as Iranians jammed the highways out of Tehran fleeing from intensified Israeli airstrikes. Meanwhile,
the Fed kept interest rates unchanged this afternoon, as investors had largely expected heading into the
meeting. Trump knocked Powell for what he expected would be a decision not to lower interest rates and said
the man he put in the role during his last term had done a poor job. Gold’s appeal is increased by geopolitical
tensions and by low interest rates. But prices lost momentum after hitting a session high of $3,451.04 on
Monday, nearing a record peak set in April. Goldman Sachs said in a note that interest has shifted to other
precious metals as investors seek catch-up opportunities. “In our view, platinum and silver’s recent rallies are
primarily speculative and lack fundamental support,” it added. Spot silver shed 0.8% to $36.95 per ounce, after
reaching its highest level since February 2012 earlier. - Fed holds key rate steady, still sees two more cuts this year
The Federal Reserve on Wednesday kept interest rates steady amid expectations of higher inflation and lower
economic growth ahead, and still pointed to two reductions later this year. With markets expecting no chance
of a central bank move this week, the Federal Open Market Committee kept its key borrowing rate targeted in
a range between 4.25%-4.5%, where it has been since December. Along with the rate decision, the committee
indicated, through its closely watched “dot plot,” that two cuts by the end of 2025 are still on the table.
However, it lopped off one cut for both 2026 and 2027, putting the expected future rate cuts at four, or a full
percentage point. The plot indicated continued uncertainty from Fed officials about the future of rates. Each
dot represents one official’s expectations for rates. There was wide dispersion on the matrix, with an outlook
pointing to a fed funds rate around 3.4% in 2027. - UK inflation lingers at 3.4% in May, bolstering case for interest rate hold
The U.K.’s annual inflation rate hit 3.4% in May, in line with economist expectations, according to data released
by the Office for National Statistics (ONS) on Wednesday. The ONS had initially published data showing a 3.5%
increase in the 12 months to April, but later said a car tax data miscalculation had led to the print being
overstated. The April print would have been 3.4% without this error. The statistics body said at the time that
its general policy is not to revise inflation figures so it left the original data in place. On Wednesday, it said the
corrected vehicle tax data had been used when producing the May consumer price index. May core inflation,
which excludes more volatile energy, food, alcohol and tobacco prices, rose by 3.5% in the year to May, down
from 3.8% in the twelve months to April. - Israeli president denies pursuing regime change in Iran — goal is to ‘remove’ nuclear program
Israeli President Isaac Herzog said Wednesday that his country was not pursuing regime change in Iran, and its
attack on Tehran was aimed at eliminating its nuclear capabilities. Speaking to CNBC’s Dan Murphy, Herzog
said that regime change was “not an official objective of ours,” and the goal was “to remove the Iranian nuclear
program.” Herzog, who accused Tehran of “cheating” and “rushing to the bomb,” added that a “change in
[regime] can also bring peace in the region.” The International Atomic Energy Agency in a statement on June
9 urged Iran to “fully cooperate” with the agency, or else it would “not be in a position to provide assurance
that Iran’s nuclear programme is exclusively peaceful.” On June 13, Israel launched a series of airstrikes
against Iran, targeting locations it said were related to the country’s nuclear program. Both sides have since
been trading strikes. “One has to be tough sometimes in order to remove imminent threats. That’s exactly
what we’re doing,” Herzog told CNBC, adding that the strikes on Iran have had a genuine impact on its nuclear
program. U.S. president Donald Trump reportedly said on Wednesday that Iran was “very close” to having a
nuclear bomb, putting him at odds with the testimony of his National Intelligence Director Tulsi Gabbard gave
to the U.S. Congress in March. - Visa and Mastercard both fell amid continued worries about the impact of stablecoins on the credit-card
issuers
The US Senate passed stablecoin legislation with a 68-30 vote, setting up regulatory rules for cryptocurrencies
pegged to the dollar. The legislation requires dollar-pegged stablecoins to hold dollar-for-dollar reserves in
short-term government debt or similar products overseen by state or federal regulators. Industry backers hope
the legislation will turn stablecoins into a mainstream form of payment. Retailers had signed on to the bill with
the idea that they can provide a cheaper, faster way to process transactions than traditional banking products
like credit cards and checks. The stocks extended declines after White House crypto czar David Sacks told
Bloomberg Television that stablecoin legislation would cause the asset class to grow and create demand for
the US dollar. “While V/MA can definitely lose some market share to the stablecoin ‘rail’ over the longer-term
in some use cases, there is also a lot of opportunity for the networks to become important participants in the
crypto ecosystem,” Evercore ISI analyst Adam Frisch wrote. Frisch expects the stocks to remain volatile on
stablecoin headlines but doesn’t foresee a material threat to the companies’ long-term core business models.
Coinbase shares jumped 16%, while newly public stablecoin issuer Circle rallied 33.8%. “The move in COIN
shares is likely on the back of enthusiasm around Circle,” Mizuho analyst Ryan Coyne wrote in a message,
noting that Coinbase has a revenue-sharing agreement with Circle. Coinbase shares also got a boost after the
company announced Coinbase Payments, a stablecoin payments stack designed for commerce platforms. - Boeing Co/The (BA US)
The National Transportation Safety Board (NTSB) has called for urgent action to address an engine issue on
Boeing 737 Max aircraft that can cause smoke in the cockpit or cabin. The issue is linked to a malfunction of
the engine’s load reduction device, which can occur when large birds strike the engine, and has resulted in at
least two incidents involving Southwest Airlines flights. The NTSB has recommended that the Federal Aviation
Administration (FAA) and other regulators ensure that flight crews are alerted to the problem and that software
modifications are implemented to address the issue. - Airbus shares rose 1.4% after the planemaker said it was extending the upper range of its dividend payout
ratio to 30-50% from the current level of 30-40%
The company reiterated its 2025 guidance, expecting to generate over €1 billion in earnings before interest
and taxes in each of its divisions by 2028. Airbus aims to deliver 820 aircraft this year, an increase from 2024
but below its pre-Covid peak of 863 planes in 2019. Citi: Analyst Charles Armitage notes the company has also
confirmed expected cash conversion of about 1x over the next five years. - Marvell Technology shares rose 7.1%, with analysts positive on the chipmaker following an event focused
on AI. At the event, Marvell raised its overall data center total addressable market to $94 billion by 2028, up
from $75 billion
JPMorgan (overweight, PT $130): At the event, Marvell “presented a compelling and sustainable growth
strategy for its AI datacenter networking/ASIC business” and it “confirmed design wins with multiple
customers”. “Bottom line, if the team can execute to its datacenter growth strategy,” then there is “significant
upside in the stock from current levels”. Raymond James (outperform): The firm “walked away with
incremental conviction in MRVL’s longer term growth potential given the large TAM and multi-generational
hyperscale customer engagements”. The risk profile is “particularly attractive”Citi (buy, PT $96): The event
“should help investors’ concerns around customer A (AWS) concentration risk in 2025/26. - AST SpaceMobile stock jumps after Vodafone Idea partnership
AST SpaceMobile Inc (NASDAQ:ASTS) stock surged 10.6 % following the announcement of a strategic
partnership with Vodafone (NASDAQ:VOD) Idea (Vi), one of India’s leading telecom service providers, to
expand mobile connectivity across India’s unconnected regions. The partnership aims to combine Vi’s national
network with AST SpaceMobile’s space-based cellular technology, which connects directly to standard
smartphones without requiring specialized software or device modifications. This collaboration puts AST
SpaceMobile in position to access India’s massive telecom market of over 1.1 billion mobile subscribers. Under
the agreement, AST SpaceMobile will develop, manufacture, and manage the satellite constellation, while Vi
will oversee terrestrial network integration, operating spectrum, and market access. The companies will work
together on the SpaceMobile Satellite System designed to expand Vi’s telecom services by providing voice,
video, data streaming, and internet access in challenging terrains where traditional mobile infrastructure is
difficult to deploy. The partnership comes after AST SpaceMobile recently made history by completing the first
ever voice and video calls from space using a standard mobile phone, demonstrating the real-world viability of
its technology. “We are not just expanding coverage; we are breaking down barriers to connectivity, enabling
everyday smartphones to access 4G and 5G directly from space,” said Chris Ivory, Chief Commercial Officer at
AST SpaceMobile. The companies will also collaborate on developing commercial offerings for various sectors,
including consumer, enterprise, and IoT applications, positioning India at the forefront of global space tech
innovation.
