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What is the story about?
The record-breaking rally on Wall Street took a pause on Wednesday, June 3, amidst the latest flare up in tensions between the US and Iran, which saw the most significant exchange of strikes since the ceasefire was put in place two months ago.
The Dow Jones fell over 600 points, while the nine day rally on the S&P 500, its longest since 1995, came to a halt as the index fell 0.75%. The Nasdaq also fell 0.9%, putting an end to its record run.
Both US and Iran have accused of violating the April ceasefire agreement. The US Central Command says Iran launched strikes at the main US naval base in Bahrain and also at a civilian airport in Kuwait that killed an Indian national.
According to Iran's foreign ministry, attacks made by the US on an empty Iranian tanker and on Qeshm Island were launched from Kuwait and Bahrain and the rulers of both these countries are responsible for any action taken by the US from their soil.
In response, Kuwait rejected the allegations and also expelled two Iranian diplomates as a mark of protest against the attacks.
The flare-up resulted in a rise in Crude oil prices, with the West Texas Intermediate (WTI) rebounding back to $96 a barrel. The 10-year bond-yield in the US is also back at 4.5%.
According to the Fars news agency quoting Iran's negotiating team, the contact with the US has not been cut off but no progress has been made in the negotiations either.
The report further stated that if finalized and agreed upon, the US-Iran MoU will go through a four-stage mechanism, adding that the latest US draft's response has not yet been sent to Washington.
While the Dow futures are quiet in late evening trade, the S&P 500 futures are down nearly 40 points, while the Nasdaq futures are down over 250 points.
This is due to a steep fall in shares of Broadcom and Crowdstrike, whose post-results commentary disappointed the street. Both companies reported results after the closing bell.
Broadcom plunged 12.5% in extended trade after the company said AI semiconductor revenue for the ongoing quarter which ends in July, will be $16 billion, lower than the analysts projection of $17.2 billion. The full year forecast of $56 billion also fell short of the $57.6 billion estimate.
Shares of Crowdstrike also fell 10% afterhours after its second quarter sales guidance met expectations but failed to impress the street.
Despite the war uncertainties, the US macro data remained fairly stable with the Services PMI rising to 54.5, the highest in three months, while private payrolls increased by 1,22,000, in-line with estimates of 1,20,000. The addition is the highest since January 2025.
The Dow Jones fell over 600 points, while the nine day rally on the S&P 500, its longest since 1995, came to a halt as the index fell 0.75%. The Nasdaq also fell 0.9%, putting an end to its record run.
Why US Markets Fell On Wednesday?
Both US and Iran have accused of violating the April ceasefire agreement. The US Central Command says Iran launched strikes at the main US naval base in Bahrain and also at a civilian airport in Kuwait that killed an Indian national.
According to Iran's foreign ministry, attacks made by the US on an empty Iranian tanker and on Qeshm Island were launched from Kuwait and Bahrain and the rulers of both these countries are responsible for any action taken by the US from their soil.
In response, Kuwait rejected the allegations and also expelled two Iranian diplomates as a mark of protest against the attacks.
The flare-up resulted in a rise in Crude oil prices, with the West Texas Intermediate (WTI) rebounding back to $96 a barrel. The 10-year bond-yield in the US is also back at 4.5%.
Are the US-Iran Negotiations Suspended?
According to the Fars news agency quoting Iran's negotiating team, the contact with the US has not been cut off but no progress has been made in the negotiations either.
The report further stated that if finalized and agreed upon, the US-Iran MoU will go through a four-stage mechanism, adding that the latest US draft's response has not yet been sent to Washington.
Why Are Nasdaq Futures Down Today?
While the Dow futures are quiet in late evening trade, the S&P 500 futures are down nearly 40 points, while the Nasdaq futures are down over 250 points.
This is due to a steep fall in shares of Broadcom and Crowdstrike, whose post-results commentary disappointed the street. Both companies reported results after the closing bell.
Broadcom plunged 12.5% in extended trade after the company said AI semiconductor revenue for the ongoing quarter which ends in July, will be $16 billion, lower than the analysts projection of $17.2 billion. The full year forecast of $56 billion also fell short of the $57.6 billion estimate.
Shares of Crowdstrike also fell 10% afterhours after its second quarter sales guidance met expectations but failed to impress the street.
How Was The US Macro Data Reported On Wednesday?
Despite the war uncertainties, the US macro data remained fairly stable with the Services PMI rising to 54.5, the highest in three months, while private payrolls increased by 1,22,000, in-line with estimates of 1,20,000. The addition is the highest since January 2025.
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