Markets Rip Higher As Trump Walks Back Iran Threats

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

U.S. stocks got off to a solid start, helped by a bounce in chip names after taking a beating earlier in the week—even as tensions between the U.S. and Iran heated up.

Oil spiked early after Trump posted that the U.S. would hit Iran “VERY HARD TONIGHT” and even floated taking control of key oil infrastructure like Kharg Island. That kind of talk had energy markets on edge right out of the gate.

Meanwhile, the chip sector flipped the script. Names like Micron, AMD, and Intel rebounded nicely, and the semiconductor ETF jumped about 3%.

That’s a welcome move after last Friday’s brutal 10% drop, which had traders wondering if the sector’s monster run was finally losing steam.

Adding to the optimism, there’s growing buzz around SpaceX’s debut tomorrow, which could shine a spotlight on continued AI-driven demand.

On the data front, inflation came in mixed. Producer prices rose 1.1% in May—hotter than expected—but core PPI (stripping out food and energy) was a bit cooler than forecasts. So, not exactly a clear signal, but not a dealbreaker either.

Then came the plot twist.

By midday, Trump completely reversed course, saying there would be “no strikes on Iran tonight” and that a deal was basically done.

Just like that, the market snapped out of its sideways grind and shot higher. Oil gave back its earlier gains, dragging energy stocks down, while the broader indexes took off.

Under the hood, the Mag 7 lagged again compared to the rest of the market, while falling bond yields pressured the dollar—giving gold a boost from $4,000 to $4,200. Even Bitcoin joined the party, pushing back above $63,500.

All in all, a headline-driven day with plenty of twists. With the SpaceX IPO on deck tomorrow, will today’s bullish momentum carry through—or was this just another knee-jerk reaction?

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Red Across The Board As Geopolitics And Deleveraging Fears Grow

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

Stocks started the day on shaky footing and never really found their balance.

Early selling kicked in after President Trump said talks with Iran were “taking too long” and hinted at further action. In a post Wednesday morning, he warned Iran had missed its chance at a favorable deal and would now “have to pay the price,” which didn’t exactly calm investors’ nerves.

Things escalated further after reports that U.S. forces carried out strikes on Iran late Tuesday, following the downing of a U.S. Army Apache helicopter near the Strait of Hormuz. That ramp-up in tensions quickly put markets on edge.

When geopolitical risk heats up like this, it tends to cast a shadow over everything—and right now, it’s making it tough for traders to feel comfortable putting money to work.

That said, not everyone is worried. Some are betting this is just part of the negotiation playbook and that a deal will eventually get done. But if it doesn’t, oil prices could be headed sharply higher, which adds another layer of uncertainty to the outlook.

Back in the market, chip stocks stayed under pressure for yet another session. Names like Micron, AMD, and Broadcom were all lower again, marking a fourth down day out of five.

There’s also a growing narrative that some investors are trimming their big semiconductor winners ahead of the highly anticipated SpaceX IPO on Friday—potentially the largest ever—as they free up capital to participate.

Even a slightly better-than-expected inflation report couldn’t spark a turnaround. Core CPI for May came in at 0.2% for the month, a bit cooler than expected, while the annual rate held at 2.9%. Still above the Fed’s 2% target, but not exactly alarming.

The headline inflation number, however, pushed back above 4% for the first time in three years—definitely not a great look and a reminder that inflation pressures aren’t fully behind us.

By the closing bell, stocks were broadly beat up and still trying to catch up with moves we’ve already seen in bond yields and crude oil.

The Nasdaq took the hardest hit, and notably, dip buyers were nowhere to be found—a bit of a red flag in itself.

Bitcoin once again did its own thing, bouncing nicely off the $61K level and finishing the day with gains.

Meanwhile, bond yields were relatively steady, the dollar slipped a bit, and gold took a sharp hit. That drop in gold was likely driven by margin calls, forcing leveraged traders to sell positions quickly to raise cash.

Zooming out, there’s a lot of leverage still sitting in the system—roughly $100 billion tied up in semis and hardware-related stocks, with a heavy dose of retail participation.

Now that sentiment seems to be shifting, the big question is whether we’re just seeing a typical pullback… or the early stages of a more aggressive unwind.

So, here’s the real question: if this selling starts feeding on itself, how much deeper could this deleveraging cycle go?

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Chip Rally Fizzles As Markets Struggle To Find Direction

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

U.S. stocks started off on shaky footing as the chip rally quickly ran out of steam. After a strong bounce the day before, semiconductor names lost momentum, and the dip in oil prices wasn’t enough to keep the broader market afloat.

The iShares Semiconductor ETF slipped 1.4% after Monday’s impressive 6% rebound. Micron gave back 1.8%, coming off a sharp 10% recovery the previous session. That follows a brutal stretch last week, where the stock plunged about 20% in just two days—including a 13% drop on Friday alone.

Earlier, markets had caught a tailwind from falling energy prices, as investors hoped tensions in the Middle East might ease. Iran paused its strikes against Israel but made it clear it could resume if Israeli operations in Lebanon continue.

Not long after, Israel signaled the situation is far from resolved. In other words, the headline-driven back-and-forth isn’t going anywhere anytime soon.

While AI and chip stocks have been the main drivers lately, it’s fair to wonder how much longer that theme can keep carrying the market. By the closing bell, Monday’s bounce had clearly lost its energy. Still, the major indexes managed to climb off their intraday lows, with the Dow even squeezing out a small gain.

One ongoing challenge for the market is this tug-of-war between good economic news and its side effects. Stronger data—like improvements in housing—can actually pressure stocks by fueling expectations for higher interest rates, which isn’t exactly friendly territory for already expensive valuations.

Bond yields edged lower during the session, helping stocks recover somewhat. The dollar bounced around but ultimately finished a bit weaker. Even so, gold didn’t benefit this time, as liquidity needs once again took priority, pushing both gold and bitcoin lower.

Despite the choppiness, this didn’t feel like a full shift into “risk-off” mode—but one thing stood out: dip buyers were noticeably missing in action.

So, the question is: if buyers aren’t stepping in on pullbacks, who’s going to keep this market propped up?

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Relief Rally Or False Start? Stocks Rebound As Risks Linger

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

Stocks started the day on a stronger footing, with chip names leading the rebound after Friday’s brutal sell-off. Traders seemed eager to step back in, hoping the recent weakness was just a reset rather than the start of something bigger.

Micron, which has been a key driver of this latest bull run, jumped nearly 10% after getting hit hard on Friday. Nvidia and Broadcom also bounced back, helping lift sentiment across the tech space.

But the backdrop remains anything but calm. Fresh strikes by Iran over the weekend raised new concerns about whether the already fragile ceasefire can hold. The situation escalated after Iranian Parliament Speaker Ghalibaf accused the U.S. of violating agreements, pointing to actions like the naval blockade.

Tensions kept energy markets on edge. Oil prices moved higher after Israel launched what it described as a “large-scale strike on strategic defense systems” in response to Iranian attacks.

Despite the back-and-forth, President Trump said both sides are still pushing toward an immediate ceasefire and urged them to halt hostilities altogether.

Meanwhile, one analyst pointed out that the market might be running into a different kind of problem—its own success. After a strong comeback, lingering inflation risks are still hanging over investors’ heads and could limit how far this rally can go.

Looking ahead, it’s shaping up to be a big week. Inflation data will be front and center, along with the highly anticipated public debut of Elon Musk’s SpaceX. It’s expected to be one of the largest IPOs ever and could serve as a major test for the current AI-driven market optimism.

By the close, the S&P 500 and Nasdaq managed to recover a portion of Friday’s losses—more of a relief rally than a full recovery. Bond yields ticked higher, while the dollar slipped slightly, giving gold a lift after an earlier dip. Bitcoin also bounced back, testing the $64K level.

So now the big question: was this just a classic dead-cat bounce, or the start of a more durable move higher?

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ETFs On The Cutline – Updated Through 06/05/2026

Ulli ETFs on the Cutline Contact

Do you want to know which ETFs are hot and which ones are not? Then you need my High-Volume ETF Cutline report. It tells you how close or far each of the 311 ETFs I follow is from its long-term trend line (39-week SMA). These are the ETFs that trade more than $5 million a day, so they are not some obscure funds that nobody cares about.

The report is split into two parts: The winners that are above their trend line (%M/A), and the losers that are below it. The yellow line is the line of shame that separates them. You can see how many ETFs are in each group and how they have changed since the last report (231 vs. 208 current).

Take a peek:

The HV ETF Master Cutline Report

If you are confused by some of the terms we use, don’t panic. I have a helpful Glossary of Terms for you.

If you want to learn more about the Cutline method and how it can make you rich (or at least less poor), read my original post here.

ETF Tracker Newsletter For June 5, 2026

Ulli ETF Tracker Contact

ETF Tracker StatSheet          

You can view the latest version here.

STRONG JOBS, WEAK MARKETS: WHEN GOOD NEWS TURNS BAD

[Chart courtesy of MarketWatch.com]

  1. Moving the market

Stocks got off to a rough start, with the S&P 500 and Nasdaq sliding early as chip stocks came under pressure and Treasury yields moved higher.

The big reason? A much stronger-than-expected jobs report that rattled the market.

Semiconductor names led the decline. Broadcom dropped about 3% after already tumbling more than 12% the day before. Marvell sank over 8%, and Micron wasn’t far behind, down around 6%.

The catalyst was May’s jobs report, which showed payrolls jumping by 172,000—more than double what economists were expecting. Meanwhile, the unemployment rate held steady at 4.3%, right in line with forecasts.

That kind of strength in the labor market pushed Treasury yields higher, as traders started to rethink the Fed’s next move. The 10-year yield climbed above 4.5%, and the 30-year moved past 5%.

At this point, the narrative is clearly shifting. The conversation is no longer “when will the Fed cut rates?” but rather “why haven’t they hiked again yet?” If the Fed does pivot from a more dovish stance to a hawkish one, that’s a big adjustment—and markets typically don’t handle those transitions smoothly.

In classic fashion, good news turned into bad news. Strong jobs data sent rate hike expectations soaring, and nearly every asset class moved lower. Even falling oil prices couldn’t stop the broad-based sell-off.

It turned into a tough stretch overall. The Nasdaq just logged its worst day and week since April 2025, while the S&P 500 saw its historic winning streak come to an end. Even the “Mag 7” lagged the broader market.

Elsewhere, bond yields surged, the dollar ripped higher, and gold broke below its 200-day moving average, wiping out its gains for the year. The rest of the metals complex followed suit, with silver taking the hardest hit.

Crypto didn’t escape either—Bitcoin slid along with everything else, barely holding support around the $60K level.

While the AI-driven rally has been a major force behind this bull market, it cuts both ways.

When momentum shifts and leverage unwinds, pullbacks can get sharp in a hurry—and that’s exactly the kind of environment we could be heading into.

So, the big question now is: are markets just taking a breather, or is this the start of a deeper reset as rates push higher?

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