US Strikes Iran Again, Tech Stocks Sink, More
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Hello, I'm Stephen Carroll. I'm in Brussels, where many of Europe's biggest decisions get made.
And I'm Caroline Hepke in London. We're the hosts of the Bloomberg Daybreak Europe podcast.
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News When You Want It with Bloomberg News Now. I'm Doug Krisner. We are getting word that the U.S. has launched strikes against Iran again after President Trump vowed to do so earlier in the day in response to what he said was Tehran delaying talks on an interim peace deal. Trump's remarks came after the U.S. renewed attacks on the Islamic Republic overnight. The equity market was rattled today by a renewed sell-off in some of the world's largest tech names. We had the Philadelphia Semiconductor Index losing 3.5%. Now, sentiment surrounding the AI trade has been depressed since last week's disappointing revenue forecast from Broadcom. And since then, shares in Broadcom are down 22%. Today, the Dow Industrial Average lost 1.9 percent.
The Nasdaq Composite was down 2 percent. Marianne Bartels is the chief investment strategist at Sanctuary Securities.
We kind of equate it to like the start of a roller coaster. You go up really slow, but when you come down, you come down really hard and fast. And I think one of the reasons why we've had such a sharp fall fast pullback is that there was a lot of leverage in the market. And I think you've seen some of the leverage now come out of the market. And we're starting to get early signs of an oversold condition.
That is Marianne Bartels of Sanctuary Security speaking earlier to Bloomberg. The war with Iran is still driving inflation higher. The May consumer price index rose at an annual rate of 4.2 percent, the fastest rate in more than three years. However, the core rate of retail inflation, which excludes food and energy, rose less than expected two-tenths of one percent compared to April. Now, these data set up next week's Fed decision as Kevin Walsh prepares for his first meeting as Fed chair. Here's Bloomberg's Michael McKee.
In some ways, this is a gift to Kevin Warsh, the inflation numbers today, because there's no way you can cut rates with inflation at these levels. So then the next question for Warsh is when can you? How far down does inflation have to come? And we don't know what he's going to say, but it's going to be very difficult for him or anyone to make a case for cutting this year because inflation is still rising.
That is Bloomberg's Michael McKee. After the bell, Oracle reported capital expenditures for the latest quarter above estimates, and this has raised concern about the profitability of Oracle's cloud infrastructure business. That said, sales in the infrastructure business gained 93% last quarter to $5.8 billion. That was slightly faster than the 91% increase anticipated by analysts. We got reaction from Sarah Kunst, founder and managing director at Clio Capital.
I think the expectations were for them to sort of pull a rabbit out of a hat that is not there. I don't think these are terrible results so far. We'll see in the overnight and into tomorrow. But I think the reality is that this is a company that the five year when you pull back, it's been a huge ramp up. The one year has been pretty muted. This is a company that people got excited about for a while with AI, but the bloom has sort of been off the rose.
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