This content was published on
June 3, 2026 - 16:30
4 minutes
(Bloomberg) — A renewed advance in oil sent stocks lower as bond yields rose on concern that an escalation of hostilities between the US and Iran will hinder prospects for a peace deal, with elevated energy costs fueling inflation risks.As equities fell from all-time highs, the S&P 500 snapped a nine-day winning streak. Tech shares led losses, with a closely watched ETF tracking software firms dropping 3.5%. Brent crude topped $97. Higher oil prices alongside labor-market resilience fueled declines in Treasuries. That’s added to expectations the Federal Reserve’s next interest-rate move will be a hike.The US and Iran clashed overnight, with Kuwait and Bahrain caught in the crossfire of one the most serious flare-ups since a ceasefire went into effect in early April.The developments follow days of rising tension, including over Israeli operations against Hezbollah in Lebanon, that threatens to derail US-Iran talks. The sides have agreed on a rough framework that should extend their truce and reopen the Strait of Hormuz, though negotiations over the final details are dragging on.“Ongoing tensions in the Middle East continued to cloud the broader risk backdrop,” said Fawad Razaqzada at Forex.com. “Fresh exchanges between US and Iranian forces overnight raised questions about the durability of the ceasefire arrangement.”Even as businesses face the fastest growth in input costs in nearly four years, data showed services activity picked up in May. A gauge of new orders increased, underscoring resilient consumer demand.Just days ahead of the US payrolls report, data showed companies added the most jobs since January 2025, signaling the labor market may be gaining momentum despite rising energy costs. If confirmed in official government figures, the trend could support a shift toward bets the Fed is more likely to raise rates in the months ahead.Money markets project an 85% chance of a quarter-point Fed hike by year-end, up from 60% last week.“If incoming US data continue to surprise positively, investors may increasingly express a more hawkish Fed view through renewed dollar strength, particularly against lower- and zero-yielding currencies and commodities like the Japanese yen and gold,” Razaqzada noted.The greenback rose against all of its developed-world peers. The yen remained near 160 following remarks by Bank of Japan Governor Kazuo Ueda that make an interest-rate hike this month sound likely but not certain. Bullion retreated.Corporate Highlights:Broadcom Inc. shares have been on a tear. But with earnings arriving after the bell, investors will have a chance to assess whether the rally has gone too far. Google parent Alphabet Inc. upsized its equity raise to $84.75 billion from the $80 billion it announced just two days earlier in a bid to help fund growing artificial-intelligence spending plans. SpaceX is planning to offer shares at $135 apiece to raise $75 billion in its initial public offering, according to people familiar with the matter, as Elon Musk rejects another Wall Street convention by setting a fixed price ahead of the marketing phase of the deal. Meta Platforms Inc. is selling businesses access to an AI agent for the first time, its latest effort to generate revenue to offset the company’s hefty investments. Palo Alto Networks Inc. released a forecast for adjusted earnings that was stronger than anticipated, signaling ongoing demand for security services as AI-related threats continue to raise concerns for companies and governments. Some of the main moves in markets:StocksThe S&P 500 fell 0.4% as of 10:30 a.m. New York time The Nasdaq 100 was little changed The Dow Jones Industrial Average fell 0.8% The Stoxx Europe 600 fell 0.5% The MSCI World Index fell 0.3% CurrenciesThe Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.2% to $1.1604 The British pound fell 0.3% to $1.3430 The Japanese yen was little changed at 159.96 per dollar CryptocurrenciesBitcoin fell 1.3% to $66,615.84 Ether fell 2.6% to $1,854.39 BondsThe yield on 10-year Treasuries advanced three basis points to 4.48% Germany’s 10-year yield advanced four basis points to 3.01% Britain’s 10-year yield advanced five basis points to 4.91% CommoditiesWest Texas Intermediate crude rose 1.5% to $95.14 a barrel Spot gold fell 0.9% to $4,448.85 an ounce ©2026 Bloomberg L.P.
