Trump Iran threat and hot US CPI hit markets; oil >$90

President Donald Trump warned the United States would be “attacking them, attacking them very hard” in response to overnight attacks that broke a fragile truce with Iran. The comments pushed West Texas Intermediate crude above $90, settling near $91.84 a barrel on Wednesday.

The U.S. Labour Department reported headline consumer prices rose 4.2% year‑on‑year in May, the highest annual reading since April 2023. The hotter-than-expected CPI reinforced expectations that the Federal Reserve may keep interest rates higher for longer.

U.S. equities moved lower on the combined geopolitical and inflation news. The S&P 500 fell 1.6%, the Nasdaq 100 dropped 2%, and the Dow Jones Industrial Average slipped 1.9%. The Philadelphia semiconductor index declined about 3.6% as weakness in technology and chip stocks spread through the market.

Investors raised concerns that large private capital raisings by technology and aerospace firms could force institutional managers to sell liquid public holdings. Reports of a fixed $135-per-share offering by a private aerospace firm and a confidential IPO process at an AI company were cited as factors that may drain liquidity from public markets. Shares in several transport and freight companies plunged after Amazon announced an expansion of its internal shipping network.

Fixed-income markets reflected higher-for-longer pricing. The 10-year U.S. Treasury yield rose roughly four basis points to about 4.55%. Spot gold fell about 4.4% to trade near $4,072 an ounce. The U.S. dollar index was largely unchanged while the euro traded around 1.1535 and the pound near $1.3368. The Japanese yen inched higher to roughly 160.50 per dollar, near the late-April level that previously prompted intervention by authorities.

Asia-Pacific markets opened lower after the Wall Street selloff. South Korea’s KOSPI fell about 2.4% and Taiwan’s TAIEX declined about 2.3%. Japan’s Nikkei 225 eased about 1.5% and Hong Kong’s Hang Seng dropped about 1.4%. China’s CSI 300 and A50 each lost under 1%, Australia’s ASX 200 eased 0.3%, and Singapore’s STI declined 0.5%. The South Korean won traded near a 17-year low around 1,530 per dollar. The Indonesian rupiah showed some stabilization after Bank Indonesia implemented a surprise emergency rate hike earlier in the week and the currency rebounded from a record low near 18,180 per dollar.

Technical indicators on U.S. equity benchmarks showed increased downside risk. The US Wall Street 30 contract fell below its 20-day moving average and moved out of a medium-term ascending channel that began on March 30. Short-term resistance was watched in the 50,390–50,540 area, with potential support levels around 49,730 and 49,250–49,095.

Traders briefly pushed futures higher after U.S. Central Command reported military strikes on Iranian targets had been completed, but the rally was limited. Market participants will watch the European Central Bank interest rate decision and press conference, U.S. producer price data and weekly initial jobless claims for further market direction.