Dow Logs Worst Day Since March, S&P 500 And Nasdaq Snap Win Streak After US-Iran Exchange Fire — SNDK, TSLA, GOOGL, META, IREN In Focus

• The S&P 500 fell 0.7%, and the Dow Jones slipped 1.2%, while the Nasdaq 100 lost 0.3%.
• Oil prices and Treasury yields spiked as the U.S. and Iran exchanged fire. 
•  Alphabet upsized its equity raise to $84.75 billion from the $80 billion it announced just two days earlier.

U.S. benchmark stock indices ended lower on Wednesday, with the Dow Jones index falling the most since March as oil prices and Treasury yields rose amid an exchange of fire between the U.S. and Iran in the Middle East. 

The S&P 500 ended 0.7% lower, the Nasdaq 100 lost 0.3%, and the Dow Jones fell 1.2% on Wednesday, each index slipping from record highs touched in the previous session, as per data from Koyfin. The Russell 2000, which tracks stocks with small market capitalization, fell nearly 1.3%.

Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY) and Invesco QQQ Trust (QQQ) ended Wednesday around 1.1% and 0.9% lower, respectively. The SPDR Dow Jones Industrial Average ETF Trust (DIA) lost 1.1%. 

The VanEck Semiconductor ETF (SMH) dropped 1.2%, pushing retail sentiment on the semiconductor ETF into bearish territory.

Meanwhile, retail sentiment on Stocktwits for SPY was “bullish”, while sentiment for QQQ and DIA moved to the “bearish” territory from being “extremely bullish” in the previous session. 

US Market Drivers

The ongoing war in the Middle East continued to behave as an overhang on investor sentiment on Wednesday, with the U.S. and Iran exchanging fire.

U.S. Central Command reported that American units neutralized drones and ballistic missiles launched by Iran, subsequently executing "self-defense strikes" on Qeshm Island. These actions followed an announcement from the Kuwaiti military via social media late Tuesday, which confirmed that their air defense networks were actively engaged in "intercepting hostile targets."

This was among the most serious flare-ups since the ceasefire negotiations began in April. 

“Ongoing tensions in the Middle East continued to cloud the broader risk backdrop,” said Fawad Razaqzada at Forex.com in an interview with Bloomberg News. “Fresh exchanges between US and Iranian forces overnight raised questions about the durability of the ceasefire arrangement.” 

Alternatively, the Federal Reserve on Wednesday reported that the U.S. economy expanded at a slight-to-moderate pace through May, even as escalating geopolitical tensions in the Middle East drove up energy costs and fueled a sharp acceleration in inflation.

According to the latest Beige Book survey of regional economic conditions, business activity increased across 10 of the central bank's 12 districts. However, soaring costs due to spiking oil prices amid the war in the Middle East is reshaping consumer behavior and threatening corporate profit margins.

Trending Stocks To Watch 

SanDisk (SNDK): Shares hit a record high after Morgan Stanley raised its price target on the stock, citing continued outpace of memory demand over supply as more companies look to spend more on building their AI infrastructure.     

Tesla (TSLA): The EV maker delivered a breakout performance in Japan in May, with new vehicle registrations jumping 182% year over year to 1,996 units, according to preliminary data from the Japan Automobile Importers Association.    

Alphabet (GOOGL):  The company priced an upsized $84.75 billion equity capital raise, including a $10 billion private placement from Berkshire Hathaway, as the tech giant races to build out AI infrastructure and global compute capacity to meet surging demand.   

Meta Platforms (META): The Instagram owner announced  the global launch of Meta Business Agent, a new artificial intelligence tool aimed at allowing businesses of all sizes to automate customer interactions across WhatsApp, Messenger, and Instagram. 

Iren (IREN): Shares climbed more than 4%, its highest level in nearly seven months, as investors welcomed the company’s first data center project in Australia.  

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