On Tuesday, major U.S. stock indexes closed lower, with the S&P 500 Index declining by 0.45%, the Dow Jones Industrial Average down by 0.25%, and the Nasdaq 100 dropping by 1.77%. The broader market faced pressure largely due to a selloff in semiconductor stocks, notably following Samsung Electronics’ earnings report, which despite a 19-fold profit increase, led to an 8% drop in its shares in South Korea.
In the commodities market, WTI crude oil prices surged over 5% to reach a 1.5-week high due to attacks on shipping in the Strait of Hormuz, raising inflation expectations. The U.S. May trade deficit widened to $77.6 billion, the largest in 14 months. Commentary from New York Fed President John Williams indicated continued inflation concerns.
In international markets, the Euro Stoxx 50 fell by 1.22%, while China’s Shanghai Composite dropped to a 3.5-week low, falling by 1.26%. Over in the bond market, the 10-year T-note yield rose to a 3.5-week high of 4.54%. The markets are currently pricing in a 27% chance of a 25 basis point rate hike at the upcoming FOMC meeting on July 28-29.
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