Morning Brief: US and Iran Issue Conflicting Public Statements During Diplomatic Talks, Semiconductor Selloff Drags Nasdaq Down Over 2%, Trump’s Approval Hits All-Time Low of His Term

Key Snapshot

🕊️ Washington and Tehran released contradictory statements over two core topics: full IAEA nuclear inspections and frozen asset unfreezing. Trump claimed Iran agreed to unlimited top-tier inspections, while Iranian authorities flatly denied the remark.

🛢️ Shipping traffic through the Strait of Hormuz has gradually recovered, with a minimum of 36 merchant vessels transiting the waterway on the 24th, keeping crude prices subdued.

📉 US semiconductor stocks suffered a massive rout; the Philadelphia Semiconductor Index plunged more than 7%, pulling the Nasdaq 2.21% lower and the S&P 500 down 1.44%.

📊 Trump’s public approval rating fell to 34%, the lowest reading of his presidency. A Reuters/Ipsos poll found half of US voters believe a military conflict with Iran carries costs that far outweigh any potential gains.

I. Market Outlook

Core Events

Following the opening round of bilateral negotiations in Switzerland, the US and Iran offered starkly opposing accounts regarding nuclear inspection protocols and the release of Tehran’s frozen overseas assets.

Trump asserted Iran had consented to unrestricted, highest-standard nuclear inspections. In contrast, Iranian Foreign Ministry Spokesman Baghaei clarified that the International Atomic Energy Agency (IAEA) has not scheduled any inspectors to visit Iranian nuclear facilities, and nuclear oversight is not on the current negotiation agenda.

Market Reaction

US chip stocks were hammered across the board, with the Philadelphia Semiconductor Index tumbling over 7% and Micron Technology slumping more than 13%.

August WTI crude futures closed 0.88% lower at $73.21 per barrel, while August Brent crude settled down 1.05% at $77.08 per barrel.

Exclusive Insight

The US-Iran talks delivered partial alignment alongside irreconcilable core divides: both sides reached consensus on the 60-day crude export sanctions waiver and restored Hormuz shipping access, yet remain deeply split on nuclear inspection authority and full control over frozen assets.

Divergent public remarks confirm the framework deal amounts to a temporary de-escalation truce, rather than a comprehensive permanent peace accord.

The sharp selloff in semiconductor names stems from a broad market revaluation of stretched AI sector valuations. Chip leaders including Nvidia and Micron, which have doubled share prices year-to-date, underwent valuation de-rating amid mounting Fed rate hike expectations.

Trump’s approval sinking to a term-low 34% signals mounting military conflict costs are steadily eroding his domestic political support base.

II. Overnight Market Performance

Summary

Deep rifts in US-Iran diplomatic dialogue paired with a sweeping semiconductor selloff pushed the Nasdaq down over 2%, and the US Dollar Index climbed to a fresh 13-month high.

— US Equities:

Dow Jones Industrial Average: -47.22 pts (-0.09%) to 51,665.49

S&P 500: -107.32 pts (-1.44%) to 7,365.47

Nasdaq Composite: -579.56 pts (-2.21%) to 25,587.04

💡 The entire semiconductor sector logged steep losses; the Philadelphia Semiconductor Index shed over 7%, Micron fell more than 13%, and Western Digital lost over 8%. Goldman Sachs strategists characterised the pullback as a broad valuation de-rating, rather than a fundamental reversal of long-term AI investment logic.

— European Equities:

STOXX Europe 600: -0.7%

German DAX: -0.98%

French CAC 40: -0.71%

UK FTSE 100: marginal loss of 0.09%

— Fixed Income:

US 2-year Treasury yield: -4.02 bps to 4.19%

US 10-year benchmark Treasury yield: -1.41 bps to 4.493%

The 2s/10s Treasury yield spread widened to 30.3 bps.

— Commodities:

August WTI crude futures: -0.88% close at $73.21/bbl

August Brent crude futures: -1.05% close at $77.08/bbl

COMEX June gold futures: -1.24% to $4,129.9/troy oz

COMEX June silver futures: -5.35% to $62.02/troy oz

LME copper: roughly -2% to $13,371/tonne

💡 Recovering vessel transit through the Strait of Hormuz kept crude prices under pressure, with at least 36 merchant ships passing through on the 24th. Gold faced headwinds from a strengthening US dollar, while silver tumbled over 5% to rank as the worst-performing base metal.

— Foreign Exchange:

US Dollar Index: +0.38% to 101.39, intraday peak at 101.42, the highest level since May 2025

EUR/USD: -0.41% to 1.138

GBP/USD: -0.45% to 1.3187

USD/JPY: marginal gain of 0.01% to 161.55

💡 The US Dollar Index hit a 13-month peak, driven primarily by rising market bets on Fed monetary tightening. USD/JPY hovered around 161.5; former Bank of Japan Policy Board Member Sayuri Shirai warned the yen could slide as far as 165 against the dollar.

— Crypto Assets:

Bitcoin: down more than 2% to below $64,000 per BTC

Ethereum: down over 2% to around $1,680 per ETH

III. Macro News

🕊️ US and Iran issue conflicting public statements on nuclear inspections: Trump claims Iran accepts unlimited oversight, Tehran issues firm denial

Trump stated Iran had agreed to the strictest form of nuclear inspections with no expiration date. Iranian Foreign Ministry Spokesman Baghaei countered that the IAEA has no scheduled visits to Iranian nuclear sites, and nuclear oversight is excluded from current negotiation topics.

Iran’s UN Ambassador explicitly commented: “No such decision has been made, nor has this topic even been brought up for discussion.”

Insight: Public contradictions over nuclear oversight prove the agreed framework only delivers a temporary de-escalation truce, not lasting peace. Inspection jurisdiction will stand as the core bargaining chip in subsequent negotiation rounds.

💰 Dispute over the utilisation of $120bn frozen assets: Trump demands funds fund US agricultural purchases, Iran rejects the obligation

Iran Central Bank Governor Hemati responded to Trump’s requirement that unfrozen capital be exclusively spent on US farm goods: “Under the signed memorandum of understanding, we bear no mandatory duty to purchase agricultural products from the United States.”

Insight: The clash over fund usage lays bare deep mutual trust deficits. Asset unfreezing does not grant Iran full discretionary control over the capital, setting the stage for recurring bilateral friction down the line.

🛢️ Shipping flows through the Strait of Hormuz gradually recover, 36+ merchant vessels recorded transiting on the 24th

After Washington rolled out the 60-day crude export sanctions waiver, major barriers blocking Iranian oil shipments have been lifted. Qatari LNG fleets have resumed operations across the Persian Gulf. However energy consultancy Rystad Energy estimates it will take 4–6 months for maritime throughput to fully return to pre-conflict levels.

Insight: The sanctions waiver represents a material US policy concession, clearing a clear pathway for Iranian crude to rejoin global supply chains. The 60-day validity window means Washington operates under a conditional renewal framework tied to tangible negotiation progress.

📊 Trump’s approval rating drops to term-low 34%, half of Americans see Iran conflict costs outweigh benefits — Reuters/Ipsos Poll

Survey data shows merely 24% of US respondents view potential military conflict with Iran as worthwhile, while roughly 63% believe the signed framework deal is unlikely to deliver durable peace.

Insight: Mounting costs stemming from Middle East tensions keep eroding Trump’s domestic political backing. The 34% approval reading signals severe midterm election risks and may limit his domestic political leeway for future foreign policy initiatives.

IV. Corporate News

💾 Broad semiconductor rout: Philadelphia Semiconductor Index plunges over 7%, Micron slumps more than 13%

Tech stock losses dragged the Nasdaq down more than 2%. Analysts labelled the decline a broad valuation de-rating: AI beneficiary stocks still hold double-digit year-to-date gains, and the pullback serves as a correction for overcrowded speculative positioning.

A Morgan Stanley portfolio manager noted: “AI has become the dominant thematic play for momentum traders; sharp drawdowns inevitably emerge once market positioning becomes excessively crowded.”

🚀 SpaceX stock edges up 1% to halt three consecutive daily losses, debut corporate bond issuance secures 3.6x oversubscription

The first post-IPO debt offering drew heavy oversubscription, affirming market recognition of SpaceX’s credit profile, yet the modest oversubscription multiple reflects growing investor caution.

🧠 Cerebras releases maiden post-IPO earnings: revenue doubles above consensus, full-year losses still projected

Cerebras, a key rival to Nvidia in AI infrastructure hardware, published its first financial report following its stock listing. While year-over-year revenue doubled, full-year loss forecasts spurred market concerns. The profitability model for AI data centre infrastructure remains unproven.

V. Key Focus Today

📊 US May new home sales: gauge residential real estate demand resilience amid elevated interest rates.

🏛️ Fed annual bank stress test results: measure the US banking sector’s capacity to withstand heightened monetary tightening expectations.

🇯🇵 BoJ Governor Kazuo Ueda delivers a speech at the IMF forum: amid the sensitive 161.5 level for USD/JPY, Ueda’s remarks will directly shape FX market pricing.

📈 Micron earnings report: the memory chip leader’s results will test genuine underlying AI hardware demand strength.

🏛️ Nvidia annual shareholder meeting: monitor management’s outlook for AI demand and official China market operational strategy.