International
US Equity Indexes Drop, Crude Oil Jumps Following Tehran's Retaliatory Missile Strikes on Kuwait, Bahrain
US equity indexes declined while crude oil futures jumped as fresh fighting in the Middle East undermined the likelihood of a peace deal between Washington and Iran, implying the Strait of Hormuz will remain shut for the foreseeable future.The Nasdaq Composite dropped 0.9% to 26,863.1 in Wednesday's midday trading. The Dow Jones Industrial Average declined 0.8% to 50,877.8, and the S&P 500 fell 0.5% to 7,569.3.The US and Iran exchanged heavy fire on Tuesday evening after the US struck an empty oil tanker it said was attempting to breach its blockade, according to The Wall Street Journal. That set off a string of attacks by both sides, with Iran striking US bases in Kuwait and Bahrain, the WSJ reported.Kuwait came under a barrage of ballistic missiles and drones on Wednesday that shut its international airport, killed one person, and injured dozens more, the WSJ said. Iran's Revolutionary Guard said retaliatory strikes "should serve as a lesson" for the US, according to a report from Al Jazeera.President Donald Trump, in an interview released Wednesday, confirmed an earlier report that he criticized Israeli Prime Minister Benjamin Netanyahu as "crazy" in a Monday phone call, saying he was "a little bit perturbed" that Israel's fighting of Hezbollah in Lebanon was holding back peace talks with Iran, according to the Associated Press.US commercial crude oil stocks, excluding inventories in the Strategic Petroleum Reserve, declined by 8.0 million barrels in the week ended May 29 after a 3.3-million-barrel decline in the previous week, a larger drop than the 3.1-million-barrel decrease expected in a survey compiled by Bloomberg.Brent crude futures marched 2.2% higher to $98.10, and West Texas Intermediate crude oil futures added 2.6% to $96.21.Most US Treasury yields rose amid an escalation of the conflict in the Middle East, abetting inflation concerns. The 10-year jumped four basis points to 4.5%, and the two-year advanced 3.5 basis points to 4.09%.In precious metals, gold futures dropped 1.1% to $4,472.9, and silver futures slumped 2.3% to $73.82, reflecting the challenge the Federal Reserve would face in tackling supply-side price pressures.In economic news, ADP's monthly measure of private payrolls showed a 122,000 increase in May from a revised 105,000 expansion in the previous month, above expectations for an increase of 120,000 in a Bloomberg-compiled survey.The Institute for Supply Management's US services index rose to 54.5 in May from 53.6 in April, compared with expectations for 53.8 in a survey compiled by Bloomberg. The S&P Global US services index was revised downward to 50.7 in May from the 50.9 flash reading, compared with expectations for an upward revision to 51.0 in a Bloomberg-compiled survey.The Organization for Economic Co-operation and Development lowered its global economic growth projection to 2.8% for 2026, down from 2.9% in March, cautioning that the fallout from the Middle East conflict may linger even after its resolution. The OECD, however, continues to expect US economic growth at 2% this year, though it raised the estimate for next year to 1.8% from 1.7%.In company news, Macy's (M) raised its full-year outlook as fiscal Q1 earnings unexpectedly increased year over year.
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