U.S. Tech Futures Slip While Oil Falls on Lebanon Ceasefire

By Dow Jones Newswires Staff

U.S. stock futures were mostly lower in early morning European trade after a disappointing Broadcom revenue forecast helped stall the storming rally in artificial-intelligence related stocks.

Meanwhile, the dollar pulled back from a two-month high and oil prices slipped as sentiment was encouraged by a newly agreed ceasefire in Lebanon. President Trump told aides that he would only resume all-out war with Iran if Tehran kills American troops, U.S. officials said, lowering the risk of a significant escalation in hostilities.

Asian equities followed their American peers lower Thursday, though European stocks bucked the global trend to rise at the open. A week of U.S. jobs data rolls on, with weekly initial jobless claims published Thursday ahead of Friday's non-farm payrolls data.

--In early European trading, Brent crude was down 0.8% at $97.03 a barrel, while WTI futures fell 1% to $95.32 a barrel. Meanwhile, U.S. commercial crude oil stocks fell by 8 million barrels last week as export demand remained high, with an additional 8 million barrels released from the Strategic Petroleum Reserve. Global inventories have provided a cushion for the market and are likely to continue tightening into the third quarter, leaving upside risk to prices, according to analysts.

--In the U.S., futures for the S&P 500 and the tech-heavy Nasdaq were 0.2% and 0.4% lower, respectively, after the indexes broke a nine-day winning streak in the last session. Futures for the Dow Jones Industrial Average rose 0.2%, however.

Sentiment around artificial-intelligence stocks faltered after Broadcom's earnings failed to meet investor expectations for its chip revenue forecasts. Shares fell close to 12% premarket.

--Asian equity markets largely retreated as escalating geopolitical and trade tensions damped investors' risk appetite. By Thursday's close, Japan's Nikkei Stock Average was down 1.4% and South Korea's Kospi declined 1.8%. Singapore's FTSE Straits Times Index was 0.9% lower early morning European trade.

--European stocks defied falls in the U.S. and Asian markets to rise in early trade. Banks, retail-focused companies and software stocks rallied, while travel and leisure stocks also gained. The Europe-wide Stoxx 600 edged up 0.1%. Software group Capgemini rose 3.4%, pushing the CAC 40 0.3% higher. The index was also helped by an uptick for luxuries. Germany's DAX gained 0.3% as software group SAP rose 2.35% amid continued volatile trade in the sector, though semiconductor company Infineon fell 3.8%. In London, the FTSE 100 ticked 0.1% higher after opening lower. Banks in the index gain, though oil majors slip. Banks also helped the Italian FTSE MIB and Spain's IBEX 35 gain 0.2% and 0.7%, respectively. The semiconductor-heavy AEX fell 0.3%.

--The dollar eased after reaching a near two-month high against a basket of currencies on Wednesday. The DXY dollar index fell 0.1% to 99.421 after rising as high as 99.552 Wednesday. Wednesday's gains were driven by clashes between the U.S. and Iran and upbeat U.S. data. ADP private payrolls data and the ISM services report were stronger than expected, fuelling expectations the Federal Reserve could raise interest rates.

--U.S. Treasury yields were little changed in Asian trading, with investors continuing to expect a U.S.-Iran deal. "The war in the Middle East continues to dominate the global bond markets," with little room for a relief in the short term, Danske Bank's Jens Naervig Pedersen said in a note. The 30-year U.S. Treasury continued to test the 5% yield level, last trading flat at 4.990%, according to Tradeweb. The 10-year yield was also largely flat at 4.490%.

--Eurozone government bond yields fell slightly in opening trade, with markets likely taking a calmer path in the days ahead until the European Central Bank's policy meeting next Thursday. Markets almost fully price a 25-basis point interest-rate hike on the June 11 policy meeting, according to LSEG data. ECB President Christine Lagarde speaks Thursday but the rules don't allow her to touch on monetary policy, KBC Bank analysts said. Meanwhile, a total of 16.75 billion euros to 20.25 billion euros in Spanish and French government bond issuance awaits investors Thursday. The 10-year Bund yield falls 0.1 basis point to 3.021%, according to Tradeweb.

--Bitcoin fell 1.2% to $64,126 after reaching as low as $61,344 overnight, LSEG data show.

--Gold prices ticked higher. In early trading, New York futures are up 0.5% to $4,488.40 a troy ounce, aided by a softer dollar and falling crude prices. "Overall, gold remains rangebound, with steady central bank demand being offset by ETF outflows and short-term momentum traders positioning for a deeper correction," analysts at Saxo Bank said.

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(END) Dow Jones Newswires

06-04-26 0428ET