Wall Street Indices Retreat Amid Middle East Tensions: Wall Street wrapped up a turbulent week with modest losses,
As investors digested escalating geopolitical tensions, trade uncertainty, and a decline in semiconductor stocks.
A massive $6.5 trillion in expiring options significantly boosted trading activity.
Meanwhile, short-term bond yields fell after Federal Reserve member Christopher Waller
suggested that interest rate cuts could begin as early as July.

Contents

Markets Overlook Diplomatic Signals

Trump

Federal Reserve

Corporate Highlights & Market Recap

Markets Overlook Diplomatic Signals and Focus on Trade Tensions

Despite signals from U.S. President Donald Trump suggesting openness to diplomacy
In de-escalating the conflict between Israel and Iran,
Investor appetite for risk remained weak.
The semiconductor sector came under pressure,
With a key performance index dropping about 1% following a Wall Street Journal report indicating that the U.S. might
Revoke special waivers for allies operating chip factories in China.
Yields on two-year Treasury notes — typically more sensitive to monetary policy — declined to around 3.9%.
Oil prices also fell, while the dollar posted its strongest weekly performance since February.

Trump and the Balancing Act of Diplomacy

President Trump hinted at possible support for a ceasefire in the Middle East but
also warned that military intervention might happen sooner than previously indicated.
He also downplayed European diplomatic efforts following a meeting on Friday
between the foreign ministers of the UK, France, and Germany with their Iranian counterpart.

Stock losses deepened briefly after a Financial Times report revealed that Japan
canceled a high-level meeting with the U.S. in response to pressure from the Trump administration to increase defense spending.

Federal Reserve and Interest Rate Outlook

Christopher Waller reaffirmed that the inflationary effect of tariffs is likely to be short-lived.
His comments came during a CNBC interview following the Federal Reserve’s decision earlier

this week to keep interest rates unchanged for the fourth consecutive time.
Investors slightly increased their bets on a potential rate cut in September,
With a reduction in October, it is still fully priced.

Brian Buetel from UBS Wealth Management stated, “The market is currently dealing with several challenges
from geopolitical instability and tariff uncertainty to unclear signals about the Fed’s next move.”
He added, “Despite these risks, equities remain a forward-looking indicator of economic health,
And we believe growth will hold steady for the rest of the year.”

Corporate Highlights & Market Recap

Reports indicate that Meta Platforms explored acquiring AI search startup Perplexity AI before investing billions in Scale AI.
At the same time, Tesla is preparing to launch its first showrooms in India this July,
marking its official entry into the world’s third-largest automotive market.

The S&P 500 closed down 0.2% in the financial markets by 4 p.m. New York time,
while the Nasdaq 100 declined by 0.4%. The Dow Jones Industrial Average remained flat.
Globally, the MSCI World Index dropped 0.2%, and the Bloomberg Magnificent 7 Index fell by 1%.
The Philadelphia Semiconductor Index decreased 0.8%, and the Russell 2000 Index dipped 0.2%.

In the currency markets, the Bloomberg Dollar Spot Index rose 0.1%. The euro gained 0.2% to $1.1516,
while the British pound slipped 0.1% to $1.3445. The Japanese yen fell 0.5% to 146.20 per dollar.

Bitcoin dropped 0.9% to $103,406.76 in cryptocurrencies, and Ether fell 3.6% to $2,418.77.

In commodities, West Texas Intermediate (WTI) crude declined 0.3% to $74.93 per barrel,
while spot gold edged down 0.2% to $3,365.51 per ounce.

Wall Street Indices Retreat Amid Middle East Tensions

Wall Street Indices Retreat Amid Middle East Tensions

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