As developments related to tensions in the Middle East remain in focus for investors, the New York stock market started the day with gains. The recovery in chip stocks also contributed to the positive trend in the indexes.
The Dow Jones, S&P 500, and Nasdaq indexes all opened higher. The market is closely watching the renewed concerns over energy prices and inflation pressures due to the tensions.
Energy Prices Remain Stable
Despite the escalation in the region, there was no significant jump in oil prices. As of 4:30 PM TRT, Brent crude was trading at $93.11, and West Texas Intermediate crude at $90.08.
Investors are debating the possibility that the conflicts could rapidly increase energy costs and worsen the inflation outlook. This situation also influences expectations regarding monetary policy.
Fed Expectations and Data Weigh on Market
In the U.S., the Producer Price Index rose 1.1% month-over-month and 6.5% year-over-year in May, exceeding expectations. The annual increase in the PPI reached its highest level since November 2022.
Initial unemployment claims for the week ending June 6 totaled 229,000, surpassing market forecasts. These data led investors to maintain expectations that the Fed will keep interest rates steady next week, while pricing in at least one 25 basis point hike by the end of the year.
Chip Stocks Rebound, Oracle Declines
On the technology front, chip companies, which had been under pressure recently due to high valuation concerns, showed signs of recovery. Micron Technology shares rose 1%, Advanced Micro Devices shares increased by 3%, and Intel shares climbed over 9%.
Meanwhile, Oracle shares fell 11% after the market closed despite reporting better-than-expected earnings and revenue, as the company announced plans to secure additional funding to develop its artificial intelligence infrastructure.
