US equity indices retreated from record highs amid concerns over a potentially more hawkish Federal Reserve and stalled diplomatic progress between Iran and the US. The S&P 500, Nasdaq 100, and Dow Jones Industrial Average each fell more than 0.5%.
ADP data showed the private sector added a net 122,000 jobs in May, surpassing expectations and reinforcing the case for the Fed to keep interest rates higher for longer in its fight against inflation. At the same time, fresh strikes by Iran in Bahrain and Kuwait increased tensions around the current ceasefire and pushed energy prices higher.
Financial stocks came under pressure as Treasury yields rose, with JPMorgan losing about 1%. Large-cap technology “hyperscalers” were also sharply lower: Oracle, Nvidia, and Microsoft each declined more than 2.5%. By contrast, AI infrastructure names held up relatively well. Marvell Technology jumped 15%, extending a roughly 30% surge in the previous session, after Nvidia CEO Jensen Huang suggested the chipmaker could eventually become a trillion-dollar company.
In single-stock moves, Macy’s edged higher after issuing stronger guidance, while AT&T declined following a recommendation downgrade. Broadcom traded slightly higher ahead of its earnings report due after the closing bell.
