The U.S. stock market suffered a broad-based selloff.

Last night and this morning, the U.S. equity market faced a wave of sell-offs, with all three major indices dropping over 1%, large-cap tech stocks mostly declining, and semiconductor and optoelectronics-related stocks across the U.S. market plunging sharply.

Meanwhile, international oil prices surged dramatically, with WTI crude oil futures for June up over 4%. Analysts suggest that the sharp rise in oil prices has intensified market concerns about inflation making a comeback in the United States. According to CME FedWatch tool data, the market now estimates a near-40% probability that the Federal Reserve will hike interest rates by 25 basis points in December.

At the same time, there is fresh development regarding the leadership transition at the Federal Reserve. On May 15 local Eastern Time, the Federal Reserve Board announced that Jerome Powell has been appointed interim Chair until his successor, Kevin Warsh, is formally sworn in. Under procedure, President Trump must first sign Warsh’s official nomination before he can assume office.

Additionally, the ongoing deadlock in U.S.-Iran relations has heightened market tensions. According to Xinhua News Agency, on May 15, Trump said in an interview aboard Air Force One that he did not originally support a U.S.-Iran ceasefire, which was “requested by other countries.” He also stated that Iran’s proposed terms were “unacceptable.”

U.S. Stocks Plunge Across the Board

On May 15 Eastern Time, the three major U.S. stock indices plunged sharply. By close, the Dow Jones dropped 1.07%, the Nasdaq fell 1.54%, and the S&P 500 declined 1.24%. Nearly all U.S. sector ETFs collapsed, with the semiconductor ETF tumbling 3.80%.

Large-cap technology stocks broadly declined: NVIDIA and Tesla both dropped over 4%, Broadcom and TSMC ADRs tumbled more than 3%, Google A and Amazon each fell over 1%, while Meta slipped 0.68%; Microsoft rose over 3% against the trend, and Apple gained 0.68%.

The U.S. semiconductor sector plunged collectively, with the Philadelphia Semiconductor Index down 4.02%. Arm fell over 8%, Micron Technology and Intel dropped more than 6%, AMD and ASML ADRs fell over 5%, ON Semiconductor dropped over 4%, and Marvell Technology fell over 4%.

All U.S. optoelectronics-related stocks slid lower: AAOI plunged over 6%, Coherent dropped over 5%, and Lumentum declined over 3%.

Analysts point out that soaring U.S. Treasury yields, amid rising energy prices and escalating long-term inflation concerns, have made bonds more attractive relative to high-risk equities, prompting capital outflows from the U.S. stock market.

In particular, the U.S. 10-year Treasury yield surged to 4.595%, its highest level since February 2025 and the largest single-day increase in over a year; the 30-year Treasury yield climbed to 5.127%, marking the highest closing level since July 2007.

Kenny Polcari, Chief Market Strategist at Slatestone Wealth, said: “The market is beginning to realize it had risen too fast and too far ahead of fundamentals. Investors failed to fully heed signals from the bond market and economic data, instead being fully immersed in momentum trading fueled by AI narratives.”

Angelo Kourkafas, Senior Global Investment Strategist at Edward Jones, noted: “Rising global bond yields are undermining risk sentiment in financial markets. This upward trend is driven by multiple factors, including inflation concerns, expectations of central bank rate hikes, and growing government debt worries triggered by nations attempting to buffer the impact of surging energy prices.”

Trump’s Latest Remarks

The impasse between the U.S. and Iran over passage through the Strait of Hormuz remains unresolved, fueling further oil price spikes. By close, WTI crude oil futures for June rose 4.2%, adding 10.48% for the week; Brent crude oil futures for July gained 3.35%, rising 7.87% for the week.

According to Xinhua News Agency, on May 15, Trump said in an interview aboard Air Force One that he did not originally support a U.S.-Iran ceasefire, stating it was “due to requests from other countries.”

Trump emphasized: “I didn’t initially support the ceasefire—however, we paused the conflict to help Pakistan, who are great people.”

He also declared Iran’s proposed plan “unacceptable,” saying, “If I don’t like the first sentence, I just throw it away.” “If Iran possesses any form of nuclear weapons, I won’t even read the rest.”

Trump threatened to destroy Iran’s infrastructure: “We could dismantle their bridges and power facilities—within two days, we could bring their entire system to a standstill.”

According to a prior report by Iran’s Tehran Times, cited by Xinhua, the U.S. has rejected Iran’s 14-point written proposal aimed at ending the war.

The report added that the U.S. government has responded to the proposal, rejecting Tehran’s offer and “reaffirming its hardline stance,” especially on nuclear issues.

Fed: Powell Appointed Interim Chair

At 5:00 p.m. Eastern Time on Friday, the Federal Reserve Board announced in a statement that Jerome Powell has been appointed Chair pro tempore, effective immediately, until his successor, Kevin Warsh, is formally sworn in.

The Fed stated: “This interim appointment of the current Chair aligns with established practices during past transitions of Federal Reserve Chairmanship.”

Powell’s term as Chair concluded on Friday, May 15. The U.S. Senate earlier this week confirmed Warsh’s nomination for the next Federal Reserve Chair, but he must complete the swearing-in process before officially assuming duties. The Fed spokesperson declined to comment on when Warsh would be sworn in.

By procedure, President Trump must first sign Warsh’s official commission before he can take office.

Analysts note that incoming Chair Kevin Warsh faces formidable challenges: if the Middle East conflict persists and drives sustained inflation, the Fed may be forced to re-initiate rate hikes.

CME FedWatch tools indicate that the market now assigns nearly a 40% probability to a 25-basis-point rate hike by the Fed in December—up from just 13.6% a week ago.

As a result, the precious metals market plunged across the board. By close, COMEX gold futures dropped 3.01% to $4,544.60 per ounce, marking a weekly decline of 3.96%. COMEX silver futures tumbled 10.47% to $76.395 per ounce, with a weekly loss of 5.55%.

Razan Hilal, analyst at Forex.com, observed: “The current macroeconomic environment is strengthening demand for income-generating assets while diminishing the appeal of non-yielding precious metals. Traders are reassessing whether the strong rally seen earlier this year in precious metals can withstand the test of tightening financial conditions.”

Original source: Securities China