(Michael Nagle/Bloomberg)
key takeaways:
- Oil prices have fallen and are close to the price they were before the Iran war started in late February.
- President Donald Trump said on social media that the Justice Department would investigate oil companies for price gouging.
- The market selloff this week has largely targeted companies that have seen their values surge amid the AI craze.
Wall Street was set to open with modest gains on June 24 following a global selloff in big technology stocks a day earlier.
Oil prices fell again and reached levels close to those before the start of the Iran war in late February. More ships transited the Strait of Hormuz, while progress continued in US-Iran talks on a permanent end to the Iran war.
Nevertheless, ship crossings in the strait have increased in recent days, but they remain well below pre-war levels, he noted.
International benchmark Brent crude fell $1.59 to $75.21 a barrel. It has been trading below $80 in recent days, but still higher than around $70 a barrel in late February, before the war started.
Benchmark US crude fell $1.67 to $71.54 a barrel. Before the war it was about $67 per barrel.
As early as June 24, President Donald Trump said the Justice Department would investigate oil companies for price gouging.
Trump said on social media that gasoline prices are not matching the decline in oil prices, so he has asked the Justice Department to “immediately begin looking into this.”
An interim agreement with Iran has brought down crude oil prices, allowing more oil tankers to pass through the Strait of Hormuz. According to AAA, prices at the pump average $3.93 per gallon. Gasoline prices have fallen over the past month, just not as much as Trump would like.
“In other words, customers are being ‘harassed’,” Trump posted. “I have directed the DOJ to begin looking into this immediately. Gasoline prices better start going down even faster than I am seeing!”
S&P 500 futures rose 0.1% before the opening bell, while Dow Jones Industrial Average futures were flat. Nasdaq futures were up 0.3%.
Read more: Diesel prices fall below $5 per gallon
Some companies recovered some of their losses by selling on June 23 before the market opened.
Chipmaker Micron, which fell more than 13% on June 23, rose 3.2% overnight. Marvell Technology rose 1.5% in the premarket after falling 9.4% a day earlier.
This week’s selling has mainly targeted companies that have seen their values surge amid the frenzy over artificial intelligence technology. Their expensive stock prices give them greater influence over the direction of the broader market.
Outside of the AI selloff, shares of Google’s parent company Alphabet soared overnight after it announced it would replace Verizon on the Dow Jones Industrial Average on June 22. Alphabet will become the fifth Magnificent 7 company to join the index.
Take-Two Interactive jumped 3% after announcing early June 24 that its Rockstar Games would begin taking pre-orders for Grand Theft Auto VI, the latest in its blockbuster game series, at midnight June 25.
Investors are awaiting the June 25 report on the May personal consumption expenditure price index, or PCE, the Federal Reserve’s preferred measure of inflation in the US.
Bond yields remain high as inflation concerns rise amid global energy shocks. The yield on the 10-year Treasury stabilized at 4.48% early June 24.
The Federal Reserve has indicated it may raise interest rates at least once before the end of the year. As of CME Group’s date, Wall Street sees an 85% chance the central bank will raise its benchmark interest rate this year. This compares with 60% a week earlier.
The possibility of higher interest rates could deter future spending and hurt investment prices.
Elsewhere in Europe at midday, Britain’s FTSE 100 was unchanged, while Germany’s DAX fell 1.1% and France’s CAC 40 rose 0.2%.
In Asia, South Korea’s benchmark Kospi index rose 3.3% to 8,471.02, recovering from a 10% decline on June 23. Shares of memory chip maker SK Hynix, one of the country’s most valuable stocks, climbed 1%. Samsung Electronics jumped 9.8% after falling 12.3% on June 23.
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Tokyo’s Nikkei 225 fell 0.9% to 69,174.97, after falling 3.6% on June 23.
Taiwan’s Taiex, which is also heavily influenced by tech stocks, fell 2.2%.
Hong Kong’s Hang Seng was up 0.3% at 23,412.18. The Shanghai Composite Index was up 0.1% at 4,110.81. Australia’s S&P/ASX 200 rose 0.2% to 8,808.40.
The big decline in tech stocks was “an example of increased volatility” in these stocks, said James Reilly, senior markets economist at Capital Economics. “This is especially true in Korea where domestic retail buyers are playing an increasing role,” he said.
