Oil prices fell on Thursday, having pared earlier gains triggered by another round of military exchanges between the U.S. and Iran overnight, which took their tit-for-tat strikes into a second straight day.
Meanwhile, with the mega SpaceX IPO just about to hit the Street, the broader chip and tech sectors can't seem to find their feet. Major U.S. stock indexes closed lower on Wednesday as chipmakers extended recent declines, with the SOX chip index falling back over 3%. Wall Street futures were up before the bell on Thursday, however.
Oracle plunged 9% in overnight trading after its earnings on Wednesday, coming soon after Broadcom's own post-earnings swoon set nerves jangling last week. For Oracle, tensions centered on a growing debt pile as it borrows more to fund its AI infrastructure buildout.
Adding to the angst about borrowing costs, the European Central Bank is set to deliver its long-awaited rate rise on Thursday, with focus likely to be on how much more tightening it could signal down the line.
It's unlikely to suggest that today's hike is "one and done" as the Iran war is aggravating its own inflation forecasts. Markets are braced for as many as two further ECB moves later this year.
Next week, markets will turn their attention to an expected Bank of Japan rate rise and a likely hawkish Federal Reserve meeting.
Notably, Treasury yields rose shortly after tensions in the Gulf ratcheted higher, even though there appeared to be decent demand at Wednesday's 10-year Treasury debt auction. Kevin Warsh will not have an easy job at his debut meeting next week.
With that, onto today's column.
