Morning Wrap: ASX 200 to fall, S&P 500 and Nasdaq tumble as US launches new strikes on Iran

In a nutshell:

• US benchmarks sold off hard after the US launched ‘self-defence strikes’ against Iran while Trump threatened more attacks

• S&P 500 down 4.5% since 2-Jun, Nasdaq and Semis Index down 7.1% and 12% from recent record highs

• US CPI mostly in-line with expectations but hit a three-year high of 4.2% year-on-year, hardening bets the Fed's next move could be a hike

• Commodities smashed, with gold down 4.4%, platinum down 3.6%, silver down 2.9%, copper down 2.2% and more 

Let's dive in.

• Major US benchmarks sharply lower, finished near worst levels after Trump threatened fresh Iran strikes

• Another notable rotation out of Tech, with SOX down more than 12% in the last five sessions, several Mag-7 names down more than 2%

• A challenged session where once surging AI-related plays continued to unwind against an unsettled geopolitical backdrop, more militant Trump comments and a relatively in-line CPI print (headline still climbed to highest since Apr-23)

• Broad selloff for commodities (ex-Energy), gold down almost 10% in the last four sessions and down 6.4% YTD, copper down 2.2%, aluminium down 1.0% and Brent up 2.8% 

• VIX jumped 12% to 22.2, a two-month high as risk sentiment deteriorated through the session

• Bond traders positioning for multiple Fed rate hikes in coming months (BBG)

• Investors seek refuge in transportation stocks, options bets and profitable firms amid chip stock turbulence (WSJ)

• Bearish options on South Korea's Kospi climb, signaling potential market declines ahead (BBG)

• Investors warn Wall Street's IPO surge risks diminishing US stock supply, affecting equity support (FT)

• Pimco warns credit loss cycle is upon us, AI spend could widen economic outcomes (BBG)

• US launches ‘self-defence strikes’ against Iran in response to downing of Apache helicopter in Strait of Hormuz (BBG)

• Trump pledges to launch more attacks on Iran, says US will be 'attacking them very hard' (CNBC)

• Iran launched ballistic missiles and drones at US bases in Bahrain, Kuwait and Jordan (CNBC)

• US officials argue a peace deal with Iran is still close (Politico)

• Hormuz shipping volumes remain very thin as US-Iran tensions have intensified (BBG)

• OpenAI preparing a new AI model, expects to IPO within the next year (TI)

• TSMC May revenue jumps 30%, driven by strong AI chip demand and advanced semiconductors (BBG)

• SK Hynix plans US listing in August, aiming to attract AI-related investment (RT)

• SpaceX IPO could create feedback loop as demand from index-tracking funds propels shares higher (BBG)

• Amazon inks $17.5bn loan in financing led by Citigroup as its fuels its AI investment (RT)

• Oracle Q4 FY26 revenue up 21% to $19.2bn, cloud revenue up 47% to $9.9bn, EPS up 24% to $2.11 up 24%, RPO grew $85bn to a record $638bn, shares down ~6% after hours as company flagged plans to raise ~$40bn in debt and equity, following earlier $48bn raise (BBG)

• May core CPI up 0.2% month-on-month vs. 0.3% ests, 0.4% prior; annualised core at 2.9%, in-line with ests but highest since Sep-25

• May headline CPI up 0.5% month-on-month vs. 0.5% ests, 0.6% prior, second straight month of slight deceleration; annualised headline at 4.2%, in-line with ests but up from 3.8% prior, now highest since Apr-23

• Energy prices up 3.9% after a 3.8% gain in April and 10.9% in March, this accounted for over 60% of May’s headline CPI increase

• Other notable month-on-month moves include shelter index decelerating to 0.3% (from 0.6% in April), food prices up 0.2% (vs. 0.5% in April) and airfares up 2.7%

• Bank of Canada holds as expected, warns of raising policy dilemma as inflation expected to hover close to 3% in coming months (BBG)

• Energy prices dominate as ECB anticipates interest rate hike this week amid rising inflation concerns (CNBC)

• BOJ widely expected to hike by 25 bp in June, economists divided on whether bond taper will slow or stop altogether (BBG)

• China factory-gate inflation rises to highest in almost four years amid surge in raw material costs (CNBC)

• Japan wholesale inflation rises above 6% as Middle East pricing pressures intensify (RT)

• Waypoint REIT CEO Hadyn Stephens discloses sale of ~66k shares, beneficially owns 149k shares after the transaction (WPR)

• Super Retail Group outlines five-year strategy at Investor Day, introduced the ‘Ignite transformation program’ aimed at generating cost savings of ~$75pa by FY29, store portfolio planned to increase to over 900 from 790 by 2031 (SUL)

• Here come the bears: This is the part where everything reads bearish. CME's Fedwatch tool now has a 43.7% likelihood of one 25 bp hike and 22.9% chance of two 25 bp hikes by year end. The VIX spiked, bond yields are pushing up, SpaceX and other IPOs are printing excess supply in markets, AI-exposed markets like the KOSPI are pulling back sharply, a US-Iran peace deal remains a puzzle and more. The S&P 500 closed right on its 50-day moving average, but recent weakness (or rather fizzled bounces) is not a good look. Meanwhile, 'safe havens' like gold are also being liquidated and moving in tandem with equity markets. We'll just have to see where the dust settles.

• Miners smashed: A sea of red for our overnight ETF watchlist, with Gold Miners (-4.8%), Silver Miners (-4.5%), Uranium (-4.0%), Copper Miners (-3.6%) and Rare Earths/Strategic Metals (-3.2%) all sharply lower. Here comes some more resource pain.

• Wesfarmers downgraded to Neutral from Outperform; however target up to $85 from $84 (Macquarie)

Stocks trading ex-dividend: 

• Thu 11 Jun: Champion Iron (CIA) – $0.02, Future Generation Global (FGG) – $0.03, Sandon Capital (SNC) – $0.005

• Fri 12 Jun: ALS (ALQ) – $0.231, Dyno Nobel (DNL) – $0.046

Other ASX corporate actions today:       

• Dividends paid: FAR (FAR)

• Earnings: None

• IPOs: Boresight (BST) at 12:00 pm 

• AGMs: None

Economic calendar (AEST):

• 10:15 pm: ECB Interest Rate Decision (Ests: 25 bp hike to 2.4%)

• 10:30 pm: US PPI