Tech Selloff Weighs on Markets as Fed Rate Concerns Offset US-Iran Peace Optimism

Index Update

US stocks closed mixed on Monday as megacap tech weakness offset optimism over progress in US-Iran peace talks and improving Middle East energy supply prospects. The S&P 500 and Nasdaq declined amid losses in Alphabet, Broadcom, Amazon, Microsoft, Meta, and SpaceX, while Micron gained on its Anthropic partnership. The Dow rose 148 points, supported by peace deal hopes, though hawkish Fed expectations continued to pressure Treasuries.

Market Movers

Among the top-performing stocks of the session Nexentis Technologies Inc. surged 155.91%, while Eshallgo Inc. rallied 125.56%. On the losing side, Sadot Group Inc. fell 42.83%, while Julong Holding Limited. declined 33.36%, making them the weakest performers during the trading day.

Commodities Update

Crude and Brent oil fell to nearly three-month lows on Tuesday, trading around USD 73.4/bbl and USD 77.2/bbl, respectively, as progress in US–Iran peace talks eased supply disruption concerns and raised expectations of higher global oil supply. Sentiment weakened further after Washington granted Iran a 60-day license to sell oil internationally, while improving Strait of Hormuz traffic, alternative export routes, and strong Iranian shipments supported the supply recovery outlook, though uncertainty over Iran’s nuclear inspection stance remains.

Gold and silver declined on Tuesday, falling below USD 4,120/oz and toward USD 63/oz, respectively, as expectations of Fed rate hikes overshadowed optimism around US-Iran peace talks. Sentiment was pressured after Deutsche Bank and BofA revised forecasts to include a September rate hike, while investors awaited the PCE inflation report for further policy cues. Supply-side optimism also improved after Washington allowed Iran to sell oil internationally for 60 days, alongside higher Strait of Hormuz shipping activity and strong Iranian exports.

Macro Updates

The dollar index traded around 101 on Tuesday, staying near its highest level since May 2025 as investors weighed progress in US-Iran peace talks against expectations of further Fed rate hikes. Sentiment remained supported by the Fed’s hawkish stance, higher inflation projections, and revised September hike forecasts from Deutsche Bank and BofA, while markets awaited the PCE inflation report for fresh policy cues.

Bonds Commentary

The US 10-year Treasury yield hovered around 4.5% on Tuesday as investors weighed progress in US-Iran peace talks against expectations of further Fed rate hikes. Sentiment remained shaped by the Fed’s hawkish stance, higher inflation projections, and revised September hike forecasts from Deutsche Bank and BofA, while attention now turns to the upcoming PCE inflation report for fresh policy cues.

Futures Update

US equity futures declined sharply on Tuesday, with Nasdaq 100, S&P 500, and Dow futures falling 3%, 1.5%, and 0.7%, respectively, as a selloff in technology and AI-related stocks weighed on sentiment. Concerns over the sustainability of hyperscaler AI spending and its returns pressured major names such as Alphabet, Amazon, SpaceX, and semiconductor stocks, while Micron weakened ahead of earnings. Elevated Treasury yields following the Fed’s hawkish outlook also weighed on broader market sentiment, while financial stocks faced additional pressure after Apollo again limited private equity withdrawals.