The US technology sector once again came under a wave of selling

By the end of the day, the Dow Jones Index (US30) rose by 0.17%. The S&P 500 Index (US500) fell by 0.26%. The Technology‑heavy NASDAQ Index (US100) closed lower by 1.12%. The technology sector once again came under a wave of selling. Notably, the decline occurred despite a positive external backdrop in the form of falling global oil prices. The main reason for the negative close was that Monday’s rebound in semiconductor stocks completely faded, and investors returned to profit‑taking.

The sector ETF iShares Semiconductor ETF (SOXX) lost more than 3% by the end of the session, giving back a significant portion of yesterday’s 6% gain. Investor nervousness in the chip sector intensified after the fund suffered its biggest drop in six years last Friday – a 10% plunge driven by concerns over overheating valuations of companies linked to artificial intelligence.

Mexico’s annual inflation rate fell to 3.94% from 4.45% the previous month, hitting a four‑month low and returning to the Bank of Mexico’s target range (3% ±1%). This was supported by expanded government subsidies and tax incentives on fuel, which successfully insulated the domestic energy sector from the global commodity shock triggered by the recent conflict in the Middle East. The return of headline inflation to the target corridor significantly eases pressure on the Bank of Mexico and strengthens market expectations of a possible resumption of interest‑rate cuts at upcoming meetings.

European indices mostly declined yesterday. By the end of the day, Germany’s DAX (DE40) fell by 0.74%, France’s CAC 40 (FR40) closed with a 0.05% gain, Spain’s IBEX 35 (ES35) dropped by 0.27%, and the UK’s FTSE 100 (UK100) ended the session down by 1.41%.

Global oil prices (WTI) fell by roughly 3%, dropping below $86 per barrel. This marked the lowest price level since April 17 of this year. The main driver of the decline was the long‑awaited agreement between Israel and Iran to halt mutual attacks following the recent escalation. Strong pressure on oil prices also came from fundamental supply‑and‑demand factors. Fresh Chinese customs data showed a collapse in crude oil imports last month to 7.8 million barrels per day. This is China’s worst reading in eight years and nearly 4 million barrels per day below the average level of 2025.

On Friday, Japan’s Nikkei 225 (JP225) rose by 2.17%, China’s FTSE China A50 closed higher by 1.22%, Hong Kong’s Hang Seng (HK50) fell by 0.37%, and Australia’s ASX 200 (AU200) declined by 0.24%.

The offshore yuan (CNY) strengthened to around 6.77 per US dollar. Market participants actively analyzed fresh May inflation data from China, which reflected a deep divergence between the consumer and industrial sectors. Consumer inflation (CPI) in China rose by 1.2% year‑on‑year in May, slightly below the analyst consensus of 1.3%. In contrast, the industrial sector saw a powerful price rally: the Producer Price Index jumped to 3.9% year‑on‑year in May compared with 2.8% in April. This is the highest reading since July 2022, confirming a confident exit of China’s heavy industry from a prolonged period of deflation. Further pass‑through of these costs into final goods could hit domestic consumption even harder, although current consumer frugality is still restraining this negative scenario.

The Australian dollar held near a nine‑week low below 0.705 USD. Pressure on risk assets resumed after the fragile Middle East ceasefire came under threat due to new US strikes on Iran and accusations by President Donald Trump regarding the destruction of a helicopter in the Strait of Hormuz. Another round of escalation triggered a spike in energy prices, intensifying global inflation concerns and raising the risk of a prolonged period of high interest rates worldwide. Domestically, the situation is worsened by a sharp deterioration in consumer sentiment in June amid the ongoing rise in the cost of living and fuel prices. Under these conditions, market attention is focused on next week’s Reserve Bank of Australia meeting, where – despite inflationary pressure – monetary policy settings are expected to remain unchanged.