Stocks set to decline as US hits Iran, oil gains

Published Wed, Jun 10, 2026 · 06:42 AM — Updated Wed, Jun 10, 2026 · 08:50 AM

[SINGAPORE] Asian equities were set to fall as tensions escalated in the Middle East after US forces struck Iran, while technology stocks remained under pressure on Wall Street. Crude oil climbed.

Equity-index futures for Japan, Hong Kong and South Korea all pointed lower as US forces hit Iran after an American helicopter was downed. Contracts for Wall Street benchmarks declined 0.3 per cent after stocks swung sharply on Tuesday (Jun 9). The Nasdaq 100 fell 1.1 per cent as investors continued rotating out of technology shares that have driven much of this year’s rally.

West Texas Intermediate crude rose almost 1 per cent to US$89 a barrel after the latest round of attacks. The US launched “self-defence strikes” against Iran, hours after US President Donald Trump blamed Teheran for downing an American military helicopter near Oman, posing a new threat to a fragile ceasefire and hopes that a deal will be reached to reopen the Strait of Hormuz.

Elsewhere, gold dropped 0.5 per cent to about US$4,240 an ounce and the US dollar strengthened against almost all its Group-of-10 peers.

Increasing volatility is testing a market that has surged to record highs on optimism about easing geopolitical tensions and the artificial intelligence buildout. With strong US jobs data dampening expectations for Federal Reserve rate cuts, investors now face a key test on Wednesday with the release of US inflation data, which may offer fresh clues on whether policymakers will keep rates higher for longer.

“Exuberance has been building for months, pushing stocks to one record after the next, so anything perceived to be negative for equities – from higher inflation to even the potential for rate hikes – will knock the market off its footing after a historic run,” said John Cunnison, chief investment officer at Baker Boyer Bank.

The retreat in technology shares coincided with a broadening rally across the rest of the market, as nine of the S&P 500’s 11 sectors advanced. Defensive corners led the gains, with real estate climbing 2.1 per cent, health care rising 1.3 per cent and utilities adding 1.1 per cent. Tech and energy were the lone decliners.

The rotation offered a contrast to a rally that has been increasingly concentrated in a handful of technology giants.

“As much as we love to see tech’s leadership, it would be constructive to see this rally broaden out to other sectors,” said Bret Kenwell at eToro. “When leadership is concentrated in one corner of tech, the market’s foundation gets a little wobblier.”

While pinpointing the volatility’s cause has been difficult, it’s occurring in high-valuation stocks ahead of massive new equity issuance, including SpaceX’s expected IPO pricing this week.

The prospect of fresh supply is prompting questions about whether investor demand will be strong enough to absorb the new shares without putting pressure on valuations elsewhere in the market.

“Where does the money come from?” said Anthony Saglimbene at Ameriprise. “Some demand may come from cash. Some may come from new retail participation. But institutional participation in a deal of this scale can also require trimming existing winners, particularly in areas where investors already have large gains.”

Elsewhere, Treasuries advanced during the US session as the decline in oil prices helped temper inflation concerns, outweighing middling demand at the first of three longer-dated US debt auctions this week. Yields fell three to four basis points across maturities.

Oil’s retreat from the multiyear highs reached in April has eased some concerns that energy costs will keep inflation elevated and force the Fed to tighten policy. Still, investors are bracing for fresh evidence of persistent price pressures when the latest consumer price index is released on Wednesday.

Economists surveyed by Bloomberg expect annual CPI inflation to accelerate to 4.2 per cent in May from 3.8 per cent a month earlier. Core inflation, which excludes food and energy, is projected to edge up to 2.9 per cent from 2.8 per cent.

“The combination of stronger payrolls and uncomfortably elevated inflation has left markets pencilling in higher odds of the Fed having to tighten policy,” said Gennadiy Goldberg, head of US rates strategy at TD Securities. “This has continued to leave yields elevated, though risk-off moves in equities appear to be helping to backstop yields.” BLOOMBERG