Equity markets staged a recovery on Thursday, with financial and semiconductor shares leading gains, though geopolitical risks and central bank uncertainty kept overall sentiment fragile. The FTSE 100 added 0.6%, supported by bank and insurance stocks, while the Dow Jones Industrial Average rose over 200 points as beaten-down chipmakers like Nvidia and Intel found buyers. However, escalation in the Middle East—after President Trump threatened military action against Iranian oil infrastructure—pushed crude prices toward $90 per barrel, tightening financial conditions and reviving inflation fears.
The rebound follows a sharp selloff that saw the S&P 500 slide 4% from its early-June peak and tech shares enter correction territory. Oracle’s disclosure of a $20 billion debt-and-equity raise for AI infrastructure exacerbated concerns over runaway tech spending, but Bank of America’s upgrade of Intel on AI and CPU demand provided a counterweight. Meanwhile, European tech stocks like Relx and Sage Group mirrored weakness, with UBS downgrading the broader IT sector on fears that enterprise clients may shift spending away from traditional software.
For cryptocurrency markets, the mixed signals are keeping risk assets in a holding pattern. Bitcoin and ether have tracked equities closely in recent weeks amid an uncertain macro backdrop. Stronger-than-expected US producer price data (1.1% vs. 0.7%) adds to the case for the Federal Reserve to hold rates steady at its June 17 meeting, though markets still price in at least one more hike before year-end. Across the Atlantic, the Bank of England is expected to raise rates by 25 basis points in September as the UK battles sticky inflation, while the European Central Bank’s policy decision later on Thursday could provide additional direction.
Geopolitical tensions introduce a supply-side oil shock risk that, if sustained, could hit consumer spending and complicate central bank rate paths. Historically, such uncertainty has occasionally boosted bitcoin’s appeal as a non-sovereign asset, but the short-term correlation with tech names suggests crypto may remain range-bound until clearer policy signals emerge. The anticipated SpaceX market debut, potentially the largest IPO ever at a $1.8 trillion valuation, may also be siphoning liquidity from speculative tech and crypto plays as investors raise cash to participate.
