investingLive Americas market news wrap: Dollar firms as war angst creeps in

• May ISM services index 54.5 vs 53.8 expected
• US May ADP employment data +122K vs +117K expected
• Iran foreign minister: Contact with the US has not been severed but no progress made
• Iran targeted a US military ship in the Gulf of Oman – report
• Fed’s Beige Book continues to see slight-to-moderate US growth
• Geopolitical news: China, Iran, NATO, and chip shortage
• US EIA weekly crude oil inventories -7974K vs -4007K expected
• Netanyahu: Lebanon has been taken over by Hezbollah
• Fed’s Williams: I’m not that worried about persistent impacts on inflation so far
• US factory orders for April 4.8% versus 4.6% estimate
• May US S&P Global services PMI 50.7 vs 50.9 prelim
• Canada Q1 labour productivity falls 0.5%

Markets:

• Gold down $41 to $4444
• US 10-yuear yields up 3.4 bps to 4.49%
• WTI crude oil up $2.27 to $96.03
• S&P 500 down 0.6%
• Nasdaq Comp down 0.8%
• USD leads, NZD lags

The dollar moves were substantial on Wednesday in a worrisome sign of geopolitical risk as oil rose another 2.5%. The reports of an imminent deal between the US and Iran have dried up and there’s a sense we are at a turning point in the war as patience wears thin. In particular focus is USD/JPY as it rose above 160.00 and into the range where Japan will be tempted to intervene.

Elsewhere, oil prices chopped around and hit $97 before fading to $94.40 and then rising back to $96.17.The bond market has started to notice rising oil as yields ticked higher.

Outside of Iran-driven news, the AI trade showed a bit less resilience than usual. There were some attempts to drag stock markets higher but it was Nvidia that struggled, falling 3.6% in a continuation of yesterday’s reversal. We also saw a big swing lower in software stocks, where were a main catalyst in the May rally. The IGV software ETF was down 4.3%.

Alphabet shares also fell to the lowest since April in a 0.8% decline in the fourth day of losses; Microsoft was down 3.2%. On the flipside, Meta was up 4.2% on upgrades. The meme-like rally in MRVL after Jensen Huang said it will be the next trillion dollar compay continued in early trade but stumbled later and it finished up 3.7%.

Precious metals and crypto were under pressure in a sign of the deleveraging trade. Bitcoin is nearing $65,000 and threatening the late-March lows.

This article was written by Adam Button at investinglive.com.