US Markets Overnight: Tehran’s missiles, Meta’s mojo and a market that ran out of excuses

US Markets Overnight were dominated by the drums of war once again

The punters who went to bed on Tuesday night US time thinking record highs meant smooth sailing woke to a rude Wednesday morning. The US session on 3 June was dominated by a toxic cocktail of Iranian missile strikes, a resurgent greenback and a tech sector that decided it had better things to do than hold its gains.

Iran launched ballistic missiles at Kuwait and Bahrain overnight, damaging infrastructure and killing at least one person, and the oil market reacted exactly the way oil markets do: by panicking first and asking questions later. Crude ripped higher, Treasury yields followed, and equities did the opposite. Meta managed to defy the gravitational pull with a cracking enterprise AI launch, but it was a lonely green dot in a Magnificent 7 sea of red. Microsoft shed more than 3%, Nvidia gave back another 3.6%, and Apple wilted on a warning from UBS that next week’s WWDC would disappoint. If you are an Australian investor scanning US markets overnight for good news this Thursday morning, you will need to squint.

Numbers that hurt more than a flat white price hike

The S&P 500 fell 0.7% to close around 7,554, snapping its record run after just one day above the 7,600 threshold. The Dow copped the worst of it, dropping 619 points or 1.2% to roughly 50,689, dragged lower by cyclical and financial names rattled by the private equity jitters after Partners Group capped redemptions from one of its funds. The Nasdaq slipped 0.9% to around 26,853, which looks contained until you consider that Meta did a lot of heavy lifting to keep that number from being far worse. Anyone scanning US markets overnight for small cap clues would note the Russell 2000 also copped it, as rising yields and oil prices tend to hit domestically focused names hardest.

West Texas Intermediate crude surged 2.4% to settle at $96.02 a barrel, while Brent climbed 1.9% to $97.81, putting the psychological $100 mark firmly back in the conversation. Gold, which you might expect to rally on geopolitical chaos, instead slumped about 1.1% to around $4,440 an ounce as the stronger dollar and higher yields made the opportunity cost of holding bullion feel suddenly expensive. The US 10-year Treasury yield ticked up to 4.46%, and the dollar index (DXY) powered to 99.5, its highest since April. Bitcoin had a genuinely awful day, dropping roughly 4% to around $66,650, more than 50% below its October 2025 all-time high near $126,200. The VIX, Wall Street’s fear gauge, jumped from 15.8 as volatility sellers finally ran out of reasons to stay short.

Meta goes rogue while its six mates nurse their wounds

If the Magnificent 7 were a share house, Meta would be the flatmate blasting music at midnight while everyone else is nursing a hangover. Meta surged 4.2% to close at $623, the only member of the group to finish in the green. The catalyst was a one-two punch: the launch of an enterprise-grade AI business agent across WhatsApp, Instagram and Messenger, and an analyst upgrade from Arete, which lifted its price target to $735. The enterprise agent is the most concrete step yet toward a revenue line beyond advertising, and for the first time it puts Meta in direct competition with the likes of Anthropic, OpenAI and Google in the enterprise AI race. Investors liked what they saw.

Nvidia fell 3.6% to $215, giving back gains from the COMPUTEX-fuelled rally earlier in the week when Jensen Huang had the Taipei crowd eating out of his hand. The pullback was not driven by any single piece of bad news but rather by the broader risk-off mood and some profit-taking after shares had run hard. Microsoft dropped 3.2% to $427, the worst performer among the seven, pressured by general tech selling and the ongoing investor discomfort with its $190 billion AI capex commitment for 2026. Amazon fell 2.5% to $250, caught in the same downdraft. Apple slipped 1.6% to $310 after UBS warned that the company’s annual developer conference, WWDC, kicking off on 8 June, is unlikely to be a meaningful catalyst, while Counterpoint Research downgraded its global smartphone shipment forecast citing a severe memory chip shortage.

Alphabet dipped 0.9% to $356, a relatively modest decline given the stock is still digesting the $80 billion share sale announced last week to fund AI infrastructure, which includes a $10 billion investment from Berkshire Hathaway. Tesla was essentially flat at $424, doing nothing interesting for once, although data showing a 40% jump in China-made EV deliveries in May provided a quiet positive.

Chips dip, but Broadcom’s big night awaits

The Philadelphia Semiconductor Index (SOX) gave back a chunk of its recent gains on Wednesday, falling from the 13,726 level it hit on Tuesday. The pullback was broad-based rather than stock-specific, driven by the same macro headwinds pushing the rest of the market lower: rising oil, a firmer dollar, and the creeping suspicion that the Fed is more likely to hike than cut by year-end. Markets are now pricing an 85% probability of a quarter-point rate increase by December, up from 60% just a week ago, which is hardly the backdrop in which you want to be long high-multiple growth stocks.

The star of the week, Marvell Technology, which had rocketed 33% earlier in the week after Huang called it a potential trillion-dollar company at COMPUTEX, surprisingly rose nearly 4% on Wednesday’s risk-off environment. For more detail on what the COMPUTEX announcements mean for AI chip stocks, Stocks Down Under published a useful breakdown here.

The real semiconductor story in US markets overnight was what happened after the closing bell: Broadcom reported its fiscal second-quarter results with revenues coming in at $22.2 billion. Wall Street expected roughly $22.1 billion in revenue and the AI custom chip business to blow past $10 billion, with analysts pricing in about 50% revenue growth. So the headline number looked good! However, the revenue guidance for Q3 of $29.4 billion couldn’t satisfy the market’s high expectations, and the stock sold off 6% in after hours trading. At 87 times earnings heading into the print, there was very little room for error.

Keep your eyes on Friday’s payrolls

The ADP private payrolls report on Wednesday showed 122,000 jobs added in May, beating expectations, while Tuesday’s JOLTS data revealed job openings at their highest since November 2024. Both data points suggest a labour market that is heating up rather than cooling, which is precisely the wrong direction if you are hoping for rate cuts.

But the main event is Friday’s non-farm payrolls report, which has the potential to shake Wall Street to its core. A strong number could cement rate hike expectations and send yields even higher, compounding the pressure on tech multiples and risk assets. A soft number, on the other hand, might give the market just enough cover to buy the dip. For Australian investors, the payrolls print lands at 10:30 pm AEST on Friday night, which means you will either be sleeping soundly or refreshing your phone in the dark.