GLOBAL MARKETS-Stocks dip on new Iran attacks as oil prices rise

Wed, 03rd Jun 2026 13:35

* Hopes fade for Strait of Hormuz breakthrough

* Oil prices ⁠rise closer to $100

* Stocks dip, but AI hype provides support

SINGAPORE/LONDON, June 3 (Reuters) - U.S. futures and European stocks fell slightly on Wednesday as oil prices rose for a third session as hostilities flared in the Gulf after U.S.-Iran peace talks ‌stalled.

Europe's STOXX 600 index fell 0.4% while futures for the U.S. S&P 500 slipped 0.1%. The AI bull run continued in Asia, however, where stock indexes climbed to record highs in ⁠Japan and Taiwan. An Iranian missile attack damaged Kuwait's airport on Wednesday and the U.S. ⁠military hit sites near the Strait of Hormuz as the shaky ceasefire between the two sides was once again severely tested.

Iran and the United States said last week they had reached a tentative deal to halt the war, but they have yet to sign off on anything.

GROWTH COULD SLOW TO RATES RARELY SEEN The conflict could slow global growth to rates rarely seen outside of crises such as the ‌2008 financial crash and push inflation sharply higher if it continues into next year, the Organisation for Economic Co-operation and Development said on Wednesday.

Oil prices crept back towards the $100 mark, with global benchmark Brent crude up 2% to $98 a barrel.

"Last week ... the trajectory was towards some sort of MOU (memorandum of understanding) and markets were high on the belief that that was coming," said Chris Weston, head of research at broker Pepperstone in Melbourne.

"Things are looking more precarious (now). It does suggest that people are coming back to the negotiating table with less scope to get that done and I think we're seeing some of those bets being unwound." Shares in ‌major companies focused on private markets fell in the U.S. and Europe after Switzerland's Partners Group capped redemptions in a private equity fund, sending its share tumbling 16% as jitters spread from the troubled private credit sector. The U.S. ‌dollar index, which tracks the currency against its peers, was slightly higher at 99.36.

Currency traders were on edge, however, after the dollar rose against the Japanese yen to the 160 level at which the market tends to become nervous about intervention from authorities in Tokyo. The dollar then dipped to trade at 159.82 yen. The fall in the yen prompted warnings from the finance minister on Wednesday.

AI HYPE ROLLS ON In the tech space, the artificial intelligence theme appeared impervious to war worries and Wall Street stock ‌indexes eked out small gains to trade at record highs on Tuesday. Shares in Marvell Technology rose 32.5% to a record high after Nvidia boss Jensen Huang called the chipmaker the next trillion-dollar company.

AI gains have lifted tech investor SoftBank above Toyota as Japan's most valuable company.

"The market tone is still broadly upbeat, despite oil prices ticking ⁠higher as ⁠investors try to make heads or tails of what’s going on in the Middle East," said Matt ‌Britzman, senior equity analyst at Hargreaves Lansdown.

SpaceX - which is largely focused on AI - plans to raise $75 billion in a blockbuster initial public offering, according to a source familiar with the matter.

Markets, which had expected rate cuts before the Iran war, have priced in about 18 basis points of U.S. rate increases this year. A hike in Europe next week is ‌all but fully priced in following data showing inflation accelerated last month, while traders predict about a 75% chance of a June rise in Japan.

U.S. 10-year Treasury yields rose 3 bps to 4.485% . Data showed U.S. private payrolls increased more than expected in May. More comprehensive official jobs numbers are due on Friday. (Reporting by Tom Westbrook in Singapore and Harry Robertson in London; Editing by Sharon Singleton and Barbara Lewis)