Market Analysis Summary

Overview

The article discusses the current state of the Nasdaq 100, USD/JPY currency pair, and Brent crude oil prices amidst geopolitical tensions and economic indicators. It highlights the impact of renewed hostilities between Iran and the US on market sentiment and the performance of various asset classes.

Market Sentiment

Recent attacks by Iran's Revolutionary Guards on US bases and Gulf targets have led to a significant sell-off in Asian equities, with the MSCI Asia-Pacific index dropping around 3%. The Nikkei and KOSPI also experienced declines of 2% and nearly 7%, respectively, primarily due to ongoing weakness in AI-related stocks.

US Market Performance

On Wall Street, the S&P 500 and Nasdaq saw losses of 0.3% and 1%, respectively, as semiconductor stocks faced a steep decline, with the Philadelphia Semiconductor Index falling as much as 8.6% intraday.

Oil Prices

Brent crude oil prices have shown slight gains but remain under pressure, with analysts suggesting that current prices do not fully account for the risks of prolonged supply disruptions due to geopolitical tensions.

Inflation and Interest Rates

Attention is focused on upcoming US inflation data, with expectations for May's CPI to rise to 4.2%, the highest since April 2023. This has led to a consensus among traders for a 25-basis-point rate hike by the Federal Reserve by December, reversing earlier expectations for rate cuts.

Currency Analysis

The USD/JPY currency pair remains above the ¥160.00 mark, nearing levels that could trigger official intervention. The Japanese yen is trading at 160.34 against the US dollar, while gold prices have fallen to an 11-week low of $4,174.20.

Technical Analysis

Nasdaq 100

The Nasdaq 100 has shown resilience, bouncing off a one-month low of 28,197. The outlook remains neutral above this level, with potential bullish momentum if it surpasses 29,805.

USD/JPY

The USD/JPY continues to trend upwards, with a bullish outlook as long as it remains above the June 3 low of ¥159.37.

Brent Crude

Brent crude prices are on a downward trajectory, with a bearish outlook while trading below the early June high of $98.15. Key support levels are identified at $89.65 to $88.86 per barrel.