Global Markets: Oil prices tumble again on US-Iran deal; S&P 500 falls

Space Exploration Technologies

Yesterday 23:23

SpaceX rapidly scales list of world's most valuable companies
BOJ votes 7-1 to raise its benchmark policy rate to 1%
Nvidia sells $25 billion of bonds
Updates with closing US market levels
By Caroline Valetkevitch and Amanda Cooper

    NEW YORK/LONDON, June 16 (Reuters) - Oil prices fell more than 5% on Tuesday, extending this week's losses on hopes a U.S.-Iran deal to end the Middle East war will allow oil to flow through the Strait of Hormuz, while technology shares weighed on the S&P 500 and Nasdaq.
Details began to emerge of the U.S. and Iran's interim deal, with U.S. President Donald Trump saying it will rule out a nuclear weapon for Tehran and a U.S. official saying it allows Iran to sell oil upon signing.

        Brent crude futures LCOc1 fell $4.21, or 5.1%, to settle at $78.96 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 fell $4.70, or 5.8%, to $76.05.

        
    SpaceX SPCX.O roared past Amazon's AMZN.O market valuation and briefly topped that of Microsoft MSFT.O, rapidly scaling the list of the world's most valuable companies on a topsy-turvy trading day fueled by frenzied action in the firm's newly listed options contracts. SpaceX, which started trading on the Nasdaq on Friday, was up 4.8% on the day.
"It's still really all about the exuberance of SpaceX and what SpaceX can pull along with it as far as the Nasdaq," said Bruce Zaro, managing director at Granite Wealth Management in Plymouth, Massachusetts.
      Tech shares could struggle to keep the momentum going, with second-quarter U.S. earnings still weeks away, he said. 
Nvidia NVDA.O, the world's most valuable maker of AI chips, surprised investors by tapping the bond markets for $25 billion. The company said the cash would be used for general corporate purposes and the debt sale was to establish a liquid benchmark for future issuance. Nvidia shares dropped 2.4%.

        Investors were also cautious ahead of the Federal Reserve's policy update due on Wednesday afternoon, with some concerned new Fed Chair Kevin Warsh could strike a more hawkish tone at his first meeting.
The Fed is widely expected to hold rates steady at 3.50% to 3.75% and could drop its easing bias from the policy statement.
     
DOW RISES
While the S&P 500 and Nasdaq ended lower, the Dow registered a record closing high for a second straight day. 

        Technology .SPLRCT led sector declines in the S&P 500, while financials .SPSY led gainers. An index of semiconductors .SOX dropped 5.7%.

        The Dow Jones Industrial Average .DJI rose 328.64 points, or 0.64%, to 51,999.67, the S&P 500 .SPX fell 42.94 points, or 0.57%, to 7,511.35 and the Nasdaq Composite .IXIC fell 307.60 points, or 1.15%, to 26,376.34.
MSCI's gauge of stocks across the globe .MIWD00000PUS fell 2.98 points, or 0.26%, to 1,128.30.
The pan-European STOXX 600 .STOXX index rose 0.25% and had another record closing high.
In foreign exchange, the dollar dropped on ongoing optimism over a peace deal with Iran.
The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.14% to 99.55, with the euro EUR= up 0.16% at $1.1609.

        The Japanese yen JPY= weakened 0.06% against the greenback at 160.43 per dollar, after the Bank of Japan raised its benchmark rate by 25 basis points as expected to 1%, its highest level since 1995.

        The Reserve Bank of Australia, meanwhile, held rates steady at 4.35% in a unanimous decision, its first pause this year, even as inflation remains elevated. The Australian dollar AUD= was little changed at $0.707.

        The 10-year U.S. Treasury note US10YT=TWEB was last down 4.5 basis points at 4.424%. The $13 billion, 20-year note auction was successful, and 20-year yields that peaked at 4.938% during the trading day were at 4.93%.
Spot gold XAU= rose 0.59% to $4,331.14 an ounce. 

 (Reporting by Caroline Valetkevitch in New York and Amanda Cooper in London; Additional reporting by Alun John in London and Gregor Stuart Hunter in Singapore; Editing Jacqueline Wong, Rod Nickel and Jamie Freed)
 ((caroline.valetkevitch@thomsonreuters.com))