Morning Brief: US-Iran Trade Truce Violations; S&P & Nasdaq Hit New Highs; Brent Rallies 3.6%

Key Snapshot

⚔️ Iran accuses the US of "serious violations" of the ceasefire over military strikes. The US states its actions are purely defensive.

📈 S&P 500 +0.61% and Nasdaq +1.19% set fresh all-time highs, while the Dow Jones edged down 0.23%.

🛢️ Brent crude futures closed 3.58% higher at $99.58 per barrel. WTI crude fell 2.81% to $93.89 per barrel.

💾 Micron’s market capitalization surpassed $1 trillion for the first time, solidifying its leading position in AI memory chips.

I. Market Outlook

Core Events

Iran’s Foreign Ministry says US strikes on Hormozgan Province severely breach the ceasefire and complicate peace talks. The US notes the strikes target missile sites and mine-laying vessels for self-defense. Market optimism for a diplomatic solution remains intact despite mutual accusations.

The US May Conference Board Consumer Confidence Index slipped to 93.1 from 93.8, beating the market expectation of 92.0. Inflation concerns intensified, while sentiment toward the labor market improved slightly.

Market Reaction

The S&P 500 and Nasdaq rallied to record levels, and the Dow Jones dipped 0.23%. The yield on the 10-year US Treasury note dropped 8.1 bps to 4.491%.

Brent crude rebounded 3.58% to $99.58/bbl, while WTI crude extended losses by 2.81% to $93.89/bbl. Spot gold lost 1.45% to settle at $4,504.

II. Overnight Market Action

Summary

US-Iran tensions linger, yet hopes for a truce support risk assets. US equities notched new highs and Treasury yields moved lower.

US Equities

• Dow Jones Industrial Average: -118.02 points (-0.23%) at 50,461.68
• S&P 500: +45.65 points (+0.61%) at 7,519.12 (New record high)
• Nasdaq Composite: +312.21 points (+1.19%) at 26,656.18 (New record high)

💡 Strong semiconductor stocks offset macro headwinds. Value stocks underperformed while capital continued flowing into large-cap tech names.

European Equities

• STOXX 600: -0.6% at 628.01
• UK FTSE 100: +0.2%

💡 European stocks retreated after the prior rally. The FTSE 100 gained thanks to a rebound in energy stocks alongside rising Brent prices.

Fixed Income

• 10-year US Treasury yield fell 8.1 basis points to 4.491%
• 30-year US Treasury yield declined 5.9 basis points to 5.023%
• 2-year US Treasury yield slipped 8.0 basis points to 4.047%

💡 The 10-year yield fell below 4.50%. Markets priced in both de-escalated geopolitical risks and slower economic expansion.

Commodities

• WTI July crude: -2.81% at $93.89/bbl
• Brent July crude: +3.58% at $99.58/bbl
• Spot gold: -1.45% at $4,504.35/oz
• Spot silver: -1.51% at $76.9010/oz

💡 Rare divergence between Brent and WTI. Brent retains the risk premium linked to the Strait of Hormuz, while WTI is more affected by domestic US supply conditions. Gold extended its losing streak.

Currencies

• US Dollar Index: +0.13% at 99.16
• EUR/USD: -0.12% at 1.1629
• GBP/USD: -0.45% at 1.3445
• USD/JPY: +0.20% at 159.31

💡 The US Dollar strengthened modestly amid lingering safe-haven demand, despite lower Treasury yields. The Japanese Yen stays under pressure, with intervention risks still present.

Cryptocurrencies

• Bitcoin: -1.6% at $75,818.36
• Ethereum: -1.5% at $2,072

💡 Cryptocurrencies traded range-bound and failed to follow the rally in mainstream equities.

III. Macro News

⚔️ Iran accuses the US of violating the ceasefire. The US confirms its strikes are defensive operations.

Insight: Investors view the latest clashes as minor frictions rather than a full breakdown of the truce. Iran’s potential retaliation will be the next key catalyst.

📉 US May Conference Board Consumer Confidence fell to 93.1. Inflation worries grew among households.

Insight: This reading is relatively resilient compared with the record-low University of Michigan sentiment index. Inflation anxiety has spread widely, while concerns over the job market remain contained.

🏛️ Wall Street banks urge the Federal Reserve to solidify the new regulatory framework.

Insight: Banks aim to lock in current deregulation achievements before potential policy shifts under a new administration.

🛢️ The US shipped crude oil from its Strategic Petroleum Reserve to the Philippines, the first such move since November 2022.

Insight: Global crude supply remains tight. SPR releases are part of the country’s overall price management strategy for oil.

🇨🇦 Bank of Canada says structural changes in the labor market complicate monetary policy and may lift inflation pressures.

Insight: Structural issues including aging population and skill mismatches could push up long-term inflation. This is a notable view among major G7 central banks.

IV. Corporate News

💾 Micron’s market cap tops $1 trillion, strengthening its leading position in AI memory chips. — Micron joins Nvidia, TSMC and Broadcom as a $1-trillion AI hardware firm. Driven by HBM, CXL and DDR5

products, memory chips have evolved from cyclical commodities into strategic AI assets.

🛰️ Reports claim SpaceX plans to raise monthly Starlink terminal fees sharply. Elon Musk denied the reports. Starlink holds over 60% of all active satellites in orbit and is deeply integrated with US military operations.

Insight: Starlink has no viable alternatives for related military use, which underpins SpaceX’s long-term valuation.

🤖 Elon Musk announced the completion of training for Grok 5, a 1.5-trillion-parameter AI model, three times larger than its predecessor.

Insight: Musk adopts a scale-first strategy in AI competition. Synergies between Grok, SpaceX and xAI keep expanding.

V. Today’s Key Focus

🗣️ Bank of Japan Governor Ueda’s speech. Markets watch for hints on rate hikes or currency intervention amid USD/JPY at 159.3.

🏛️ Meta 2026 Annual General Meeting. Focus on AI investment, metaverse strategy and feedback on capital expenditure.

🕊️ Updates on US-Iran negotiations. Iran’s possible retaliation will decide the next trend of crude oil prices.