Dow Hits Record High, Oil Slides, Gold Rebounds

Market Overview

U.S. equities delivered a mixed performance as Broadcom's disappointing AI outlook sparked a technology selloff, prompting investors to rotate into defensive sectors. The Dow Jones Industrial Average surged 1.73% to a record closing high, while the Nasdaq ended lower. Easing geopolitical tensions in the Middle East further weighed on energy markets, with the prospect of renewed U.S.-Iran talks and President Trump's comments dismissing the likelihood of a full-scale conflict. WTI crude fell 3.16%, while Brent crude declined 2.67%. Meanwhile, declining rate expectations pushed the 10-year Treasury yield down to 4.47%, supporting a rebound in gold prices. The VIX dropped to its lowest level of the year. Chinese equities retreated, with the ChiNext Index falling 0.83%.

Dow Reaches New Record High as Sector Rotation Accelerates

Broadcom's weaker-than-expected AI guidance triggered a broad selloff in semiconductor stocks, sending the Philadelphia Semiconductor Index down 2.15% and weighing on the Nasdaq. However, strong inflows into defensive sectors such as healthcare and financials helped lift the Dow Jones Industrial Average by 1.73%, marking a new record closing high.

Among the Magnificent Seven, Alphabet outperformed with a 3.68% gain. Arm Holdings has surged 79% over the past several weeks, fueling valuation concerns. Meanwhile, Taiwan Semiconductor Manufacturing Company (TSMC) stated that it expects chip demand to continue exceeding supply for at least the next two years, with no signs of slowing capital expenditures.

Oil Prices Tumble as Middle East Risks Ease

WTI crude oil fell 3.16% to $92.99 per barrel, while Brent crude declined 2.67%, as geopolitical risk premiums rapidly unwound.

Market sentiment improved on expectations of renewed U.S.-Iran peace negotiations and reports suggesting a potential ceasefire between Israel and Lebanon. President Trump stated that he has "no intention of reigniting a full-scale war with Iran." Reports indicate that Washington and Tehran could resume talks as early as today, prompting crude prices to surrender much of their recent geopolitical gains.

Treasury Yields Decline, Supporting Gold and Silver

The U.S. 10-year Treasury yield fell 2.77 basis points to 4.47%, as lower oil prices and weaker labor market indicators reinforced expectations for monetary easing.

Spot gold advanced 1.20% to $4,490 per ounce, while silver gained 0.77%. A weaker U.S. dollar and declining yields provided additional support for precious metals. The VIX Index fell to its lowest level of the year, reflecting a notable reduction in market risk aversion.

Chinese Equities Retreat Amid Ongoing Capital Rotation

Chinese equities broadly weakened, with the Shanghai Composite falling 0.64% and the ChiNext Index declining 0.83%. However, semiconductor-related shares outperformed, led by BOE Technology, which surged to its daily limit.

In the ETF market, E Fund Management's ETF assets under management surpassed ChinaAMC for the first time, reaching RMB 618.5 billion compared with RMB 616.6 billion, signaling a shift in China's passive investment landscape.

Bitcoin briefly tested the $61,000 level and fell approximately 2.2% during the session, extending recent weakness across digital assets.

Market OutlookU.S. Nonfarm Payrolls in Focus

The U.S. May Nonfarm Payrolls report will be released today.

While job openings data have remained resilient, recent labor market indicators have softened. Combined with the sharp decline in oil prices, the 10-year Treasury yield has already retreated to 4.47%.

A weaker-than-expected payroll report would likely strengthen expectations for Federal Reserve rate cuts and benefit interest-rate-sensitive sectors. Conversely, a stronger reading could push Treasury yields higher again and place additional pressure on already fragile technology stocks.

Middle East Tensions Ease as Oil Retraces

The market is closely monitoring the possibility of renewed U.S.-Iran negotiations today. Reports of a ceasefire between Israel and Lebanon, coupled with President Trump's comments ruling out a broader military conflict, contributed to a sharp decline in crude prices, with WTI and Brent falling 3.16% and 2.67%, respectively.

Going forward, investor focus will remain on whether negotiations materialize and whether shipping flows through the Strait of Hormuz remain uninterrupted. Geopolitical developments continue to play a decisive role in shaping both oil prices and the inflation outlook.

Key Events to Watch

• U.S. May Nonfarm Payrolls Report (Today)

• Eurozone Q1 GDP Data

• Potential Next Round of U.S.-Iran Talks

• Jensen Huang Visits South Korea, Meeting with LG Group and Leaders of Major Conglomerates

• Blackstone's BCRED Private Credit Fund Hits 5% Redemption Cap

• Arm Holdings Up 79% in Recent Weeks as Valuation Concerns Intensify