Stocks End Historic Rally as Middle East Talks Still Ongoing
Jamie Dutta >
Jamie Dutta >
Jamie Dutta is a Market Analyst for Vantage. He comes with extensive experience as a full-time trader and financial market commentator, having worked as a trader in top tier investment banks and trading houses.
Updated Thu, 2026 June 4 04:25
- Iran-US reviewing exchanged texts, working on ‘final formula’
- Oil jumps as Middle East unrest deepens
- Stocks take a breather as torrid rally cools, Tech declines
- Broadcom drops sharply after hours as Q2 revenue misses estimates
Forex
USD was bid for a third straight day as it inched closer to making one-month highs. Positive data has been the flavour of the week with yesterday’s solid ADP print and ISM Services figures helping cement the resilient and even re-accelerating picture of the US economy. Risk-off sentiment also helped the greenback given retaliatory attacks seen from the US and Iran.
EUR was soft as it headed towards recent lows at 1.1576. Final PMIs pointed to mild contraction across the zone with weakness especially notable in France. Pricing for a nailed on ECB rate hike next week barely changed. As we have said before, guidance from the Governing Council and President Lagarde will be key with another hike and a half priced into the rest of the year. The 50-day SMA has capped the upside recently and now resides at 1.1649.
GBP fell to the 200-day SMA at 1.3419. Recent BoE speak has been mixed with hawkish and dovish tilts. There’s very little chance of a rate hike in two weeks, and around a 50% chance of a July 25bps rate hike.
JPY initially strengthened after Japanese PM Takaichi said the authorities are “prepared to take appropriate measures in the FX market” in relation to intervention. But the 40-tick drop was mild and the major reversed course through the day closing nears its high and 160. BoJ Governor Ueda later remarked that the BoJ’s basic stance is to continue raising the policy rate in accordance with economic, price, and financial developments. He added that upside risks to prices appear to be greater overall and are likely to emerge sooner.
Stocks
US stocks: The S&P 500 lost 0.71% to close at 7,556, the Nasdaq closed down 0.29% at 30,571 and the Dow Jones settled lower by 1.21% at 50,688. Five sectors were positive with Energy and defensives like Consumer Staples and Health leading the gains. Tech and Financials led the laggards. Marvell continued its incredible rally after Nvidia Huang’s trillion dollar company comments on Tuesday, rising another 3.7% to more record highs above $300. Intel jumped 4.4% after it said progress to date could allow it to pull in some fiscal year ‘27 margin targets. Meta outperformed the Mag 7 by some distance, adding 4.2% as investors assessed its latest push to monetise AI through a new business-focused AI agent platform. Broadcom sunk after hours after its latest earnings, down by some 11% as AI chip sales forecast disappointed.
Asian Stocks: Futures are mixed. APAC stocks were modestly higher after record highs on Wall Street, even though that was down to a handful of heavyweights. The ASX 200 outperformed in mining and materials but tech and telecoms capped the upside. The Nikkei 225 printed a fresh record high above 68,000 as the tech-heavy index moved higher. The Shanghai Composite and Hang Seng were mixed with profit taking seen in Hong Kong after recent earnings.
Gold
Gold moved lower as the dollar and Treasury yields moved north on higher oil prices. The inflationary impact of elevated energy prices is denting any upside currently in bullion. The 200-day is key long-term support, now at $4,391.
Chart of the Day – GBP/JPY just below long-term resistance
This popular cross has been in a long-term bull channel since it lows around 184.36 in April last year. The series of higher highs and higher lows hit the spike top from June 2008 at 215.89 at the end of April as few weeks ago. Intervention from the Japanese authorities then saw the pair fall sharply, but the 50-day SMA acted as support as it has done more or less since that long-term low.
The moving average now sits at 213.58 with prices just below the 2008 peak again. USD/JPY is obviously trading around 160 currently, wth all eyes on the MoF and if they are to intervene again. The dollar is looking strong going into the NFP data, with other labour market indicators all pointing to a solid report. Would Tokyo intervene into a NFP headline beat and low unemployment? Tough to see any of their objectives being met in that environment.
