The U.S. stock market suffered a broad-based sell-off.

Last night into this morning, the U.S. equity market faced a wave of selling pressure, with all three major indices dropping more than 1%, large-cap technology stocks mostly declining, and semiconductor and optoelectronics-related stocks experiencing sharp declines.

Meanwhile, international oil prices surged dramatically, with WTI crude oil futures for June rising over 4%. Analysts suggest that the sharp spike 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 nearly 40% probability that the Federal Reserve will hike rates by 25 basis points in December.

At the same time, there are new developments regarding the Federal Reserve chair transition. On May 15 (Eastern Time), the Federal Reserve Board announced that Jerome Powell has been appointed as 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 stalemate between the U.S. and Iran has heightened market tensions. According to Xinhua News Agency, Trump stated during an interview aboard Air Force One on May 15 that he did not originally support a ceasefire with Iran, saying the truce was “at the request of other countries.” He also declared Iran’s proposed terms “unacceptable.”

U.S. Stocks Suffer Broad Declines

On May 15 (Eastern Time), all 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 plunging 3.80%.

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

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

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

Analysts point out that soaring U.S. Treasury yields, amid rising energy prices and growing long-term inflation concerns, have made bonds relatively more attractive compared to higher-risk equities, triggering capital outflows from U.S. equity markets.

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

Kenny Polcari, Chief Market Strategist at Slatestone Wealth, said: “The market is beginning to realize that previous gains were too rapid and overly optimistic. Investors have failed to properly heed signals from the bond market and economic data, instead being fully immersed in momentum trading driven by AI narratives.”

Angelo Kourkafas, Senior Global Investment Strategist at Edward Jones, noted: “Rising global bond yields are undermining market risk appetite. This upward trend is fueled by multiple factors, including inflation concerns, expectations of central bank rate hikes, and government debt worries arising as nations attempt to buffer the impact of rising energy prices.”

Trump’s Latest Remarks

The deadlock over navigation rights through the Strait of Hormuz between the U.S. and Iran remains unresolved, while international oil prices accelerated upward. By close, WTI crude oil futures for June rose 4.2%, with weekly gains totaling 10.48%; Brent crude oil futures for July jumped 3.35%, with weekly gains reaching 7.87%.

According to Xinhua News Agency, Trump stated during an interview aboard Air Force One on May 15 that he did not initially support a ceasefire with Iran, saying the truce was “due to requests from other countries.”

Trump emphasized that the U.S.-Iran ceasefire was “at the request of other countries,” adding, “I didn’t originally support it, but we paused the conflict to help Pakistan—a great nation.”

He further declared Iran’s proposed terms “unacceptable,” stating, “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 also threatened to destroy Iran’s infrastructure, saying, “We can dismantle their bridges and power facilities—within two days, we could cripple their entire system.”

According to a prior report cited by Xinhua from Iran’s Tehran Times, the United States has rejected Iran’s written “14-point” proposal aimed at ending hostilities.

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

Fed: Powell Appointed Interim Chair

At 5:00 PM Eastern Time on Friday, the Federal Reserve Board issued a statement announcing that Jerome Powell has been appointed interim chair (chair pro tempore) until his successor, Kevin Warsh, is formally sworn in.

The Fed stated: “Appointing the current chair as interim chair aligns with established practices during past transitions of Federal Reserve leadership.”

Powell’s term as chair expired on Friday, May 15. The U.S. Senate confirmed Warsh’s appointment earlier this week as the next Federal Reserve chair, but he cannot officially assume office until completing the swearing-in process. A Fed spokesperson declined to comment on when Warsh would be sworn in.

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

Analysts note that incoming chair Kevin Warsh faces significant challenges: if the Middle East conflict persists and continues to push inflation higher, the Fed may be forced to reconsider rate hikes.

CME FedWatch tools show that the market now expects a 25-basis-point rate hike by the Fed in December with a probability approaching 40%, up from just 13.6% a week ago.

As a result, the precious metals market plunged across the board. By close, COMEX gold futures fell 3.01% to $4,544.60 per ounce, with weekly losses totaling 3.96%. COMEX silver futures tumbled 10.47% to $76.395 per ounce, with weekly losses amounting to 5.55%.

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

Original Source: Securities China