The Prime Daily: 04 June 2026

U.S. Markets Snap Record Run Amid Iran Tensions

U.S. equity markets ended a multi-session streak of record highs yesterday, as escalating U.S.–Iran hostilities curbed risk appetite. The Dow shed over 600 points, while the S&P 500 and Nasdaq Composite both pulled back from all-time highs set the prior session.

The S&P 500 declined 0.74% to close at 7,553, and the Nasdaq Composite fell 0.89% to 26,854. Rising oil prices, Middle East uncertainty, tech-sector dilution concerns, and mixed earnings reactions collectively weighed on sentiment, triggering a broad wave of profit-taking.

Alphabet Google’s parent slipped after expanding its AI infrastructure equity offering to $84.75 billion up from an initial $80 billion including a $10 billion private placement with Berkshire Hathaway. Investors raised concerns about shareholder dilution and the near-term cash flow impact of heavy AI and cloud spending.

Treasury yields rose across the curve, with the 10-year note climbing to nearly 4.50%. The move was driven by ADP private payroll data showing the strongest job growth since early 2025, alongside fears that elevated energy costs could keep inflation persistently high.

Bitcoin fell for a fourth consecutive session, at its lowest level since February. U.S. spot Bitcoin ETFs recorded their largest monthly net outflows of the year in May, with redemptions continuing into early June. The broader crypto retreat reflects a rotation into AI-related equities and IPO plays.

Geopolitical risk remained front of mind as Israeli Prime Minister Benjamin Netanyahu said that Israel and the United States were prepared to strike Iran again if necessary, reinforcing investor concern that prolonged conflict could keep energy prices and inflation elevated.

Asian markets also retreated. Japan’s Nikkei 225 dropped 1.74% reversing the prior session’s record high while the Topix declined 1.09%. South Korea’s Kospi fell 1.25%, though the small-cap Kosdaq surged 3.83% as trading resumed following a public holiday.

The Indian rupee extended its losing streak for the second consecutive session yesterday, depreciating by 44 paise to close at 95.70 against the US dollar. The currency remained under pressure due to persistent capital outflows, concerns over US President Donald Trump’s tariff proposals, and rising crude oil prices amid escalating geopolitical tensions in the Middle East.

In Indian markets, buying interest emerged in the second half of yesterday’s session, triggering a sharp intraday recovery of over 300 points from intraday lows. The Nifty ultimately closed at 23,405, down 78 points. Yesterday’s low of 23,151 is likely to serve as a crucial support level. 23,800 is the key resistance zone to watch on the upside.

Indian markets are poised to open subdued on weak global cues.