Oil prices tumble again on US-Iran deal; S&P 500 falls

By Caroline Valetkevitch and Amanda Cooper

NEW YORK/LONDON, June 16 (Reuters) – Oil prices fell more than 5% on Tuesday, extending this week’s losses on hopes a U.S.-Iran deal to end the Middle East war will allow oil to flow through the Strait of ‌Hormuz, while technology shares weighed on the S&P 500 and Nasdaq.

Details began to emerge of the U.S. and Iran’s interim deal, ‌with U.S. President Donald Trump saying it will rule out a nuclear weapon for Tehran and a U.S. official saying it allows Iran to sell oil upon signing.

Brent crude futures fell $4.21, ​or 5.1%, to settle at $78.96 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $4.70, or 5.8%, to $76.05.

SpaceX roared past Amazon’s market valuation and briefly topped that of Microsoft, rapidly scaling the list of the world’s most valuable companies on a topsy-turvy trading day fueled by frenzied action in the firm’s newly listed options contracts. SpaceX, which started trading on the Nasdaq on Friday, was up 4.8% on the day.

“It’s still really all about the exuberance of SpaceX and what ‌SpaceX can pull along with it as far ⁠as the Nasdaq,” said Bruce Zaro, managing director at Granite Wealth Management in Plymouth, Massachusetts. Tech shares could struggle to keep the momentum going, with second-quarter U.S. earnings still weeks away, he said.

Nvidia, the world’s most valuable maker of ⁠AI chips, surprised investors by tapping the bond markets for $25 billion. The company said the cash would be used for general corporate purposes and the debt sale was to establish a liquid benchmark for future issuance. Nvidia shares dropped 2.4%.

Investors were also cautious ahead of the Federal Reserve’s policy update due on Wednesday afternoon, with ​some ​concerned new Fed Chair Kevin Warsh could strike a more hawkish tone at his ​first meeting.

The Fed is widely expected to hold rates ‌steady at 3.50% to 3.75% and could drop its easing bias from the policy statement.

DOW RISES

While the S&P 500 and Nasdaq ended lower, the Dow registered a record closing high for a second straight day.

Technology led sector declines in the S&P 500, while financials led gainers. An index of semiconductors dropped 5.7%.

The Dow Jones Industrial Average rose 328.64 points, or 0.64%, to 51,999.67, the S&P 500 fell 42.94 points, or 0.57%, to 7,511.35 and the Nasdaq Composite fell 307.60 points, or 1.15%, to 26,376.34.

MSCI’s gauge of stocks across the globe fell 2.98 points, or 0.26%, to 1,128.30.The pan-European STOXX 600 index ‌rose 0.25% and had another record closing high.

In foreign exchange, the dollar dropped on ​ongoing optimism over a peace deal with Iran.

The dollar index, which measures the greenback against ​a basket of currencies including the yen and the euro, fell ​0.14% to 99.55, with the euro up 0.16% at $1.1609.

The Japanese yen weakened 0.06% against the greenback at 160.43 per ‌dollar, after the Bank of Japan raised its benchmark rate ​by 25 basis points as expected to ​1%, its highest level since 1995.

The Reserve Bank of Australia, meanwhile, held rates steady at 4.35% in a unanimous decision, its first pause this year, even as inflation remains elevated. The Australian dollar was little changed at $0.707.

The 10-year U.S. Treasury note was last down 4.5 ​basis points at 4.424%. The $13 billion, 20-year note auction ‌was successful, and 20-year yields that peaked at 4.938% during the trading day were at 4.93%.

Spot gold rose 0.59% to $4,331.14 an ​ounce.

(Reporting by Caroline Valetkevitch in New York and Amanda Cooper in London; Additional reporting by Alun John in London and ​Gregor Stuart Hunter in Singapore; Editing Jacqueline Wong, Rod Nickel and Jamie Freed)