Tuesday witnessed a thriller on Wall Street: "sell first, rescue later."

Markets advanced calmly in the morning, with the Nasdaq briefly rising nearly 0.7%, as chip stocks continued the rebound momentum from Monday. In the afternoon, Trump posted on Truth Social claiming that Iran shot down a U.S. Apache helicopter over the Strait of Hormuz, with two pilots rescued safely, but asserting that the U.S. "must respond" to this attack.

The Nasdaq plunged instantly, falling as deep as -3.5% intraday.

Over the next two hours, markets slowly recovered amid Trump’s follow-up statements: "negotiations are still progressing" and "a deal could be reached within two or three days." The losses narrowed by the close. The Nasdaq ended down 0.97% at 25,678.82 points, while the Nasdaq-100 dropped 1.12%. The S&P 500 fell 0.26% to 7,386.65 points. The Dow Jones rose 0.17% (+86 points) to 50,872.11 points, supported by non-tech components.

From -3.5% to -0.97%, the Nasdaq clawed back over 70% of its intraday losses in the final two hours. This recovery strength signals two key messages: first, short sellers are hesitant to aggressively add positions ahead of CPI; second, market confidence in “the Iran issue will eventually be resolved” remains intact—only a matter of time.

Helicopter Incident: First Strike on U.S. Military Assets

This marks the first loss of an Apache helicopter since the U.S.-Iran conflict reignited in late February. Though no casualties occurred, the fact that a U.S. military asset was struck crossed a psychological red line. Trump used notably hardline language—“must, of necessity, respond”—one of his strongest stances on Iran to date.

CNN reported that U.S. unmanned vessels rescued the two pilots. Iran’s Foreign Minister Araghchi later responded on X: “Foreign military forces near our territory always face risks stemming from their own human error, accidents, or unintended crossfire.” The subtext is clear: no admission of intentional downing, but no denial either.

Vice President Vance told CBS that the deal was “very close,” though “there’s still work to do.” After attending the NBA Finals (Spurs vs. Knicks), Trump told reporters the final agreement might be “reached within two or three days,” and the Strait of Hormuz would be “immediately reopened” upon signing. He emphasized, however, that the U.S. blockade of Iranian ports would remain in place until a deal is finalized.

Markets absorbed this bombshell because investors have been conditioned for 100 days—from March to June—by repeated Middle East escalations: every escalation followed by de-escalation; every missile launch accompanied by a tweet saying “negotiations continue.” This is “war fatigue”—not fatigue from war itself, but from markets repeatedly being hijacked by geopolitical tension.

Market Divergence: Tech Hit Again, Dow Steady as Ever

Among the S&P 11 sectors, only technology (-2%) and energy closed lower. The other nine sectors all finished higher. Non-tech components in the Dow held up the market.

This has been the consistent pattern of the past week: Dow stable, Nasdaq volatile. From June 4 (Thursday) to June 9 (Tuesday), the Nasdaq declined over 5% cumulatively, while the Dow dropped less than 1.5%. The trend of capital flowing from AI chips into defensive sectors—healthcare, financials, and consumer staples—shows no sign of slowing.

NVIDIA dipped 0.22%, Micron fell 1.41%. Following last Friday’s trillion-dollar chip massacre, chip stocks showed neither panic-driven second selloff nor a convincing V-shaped rebound—they’ve been grinding sideways at lower levels. Institutions are waiting for one thing: tomorrow’s CPI data.

Oil: Helicopter Down, Oil Price Falls Instead

The most counterintuitive move came in oil markets on Tuesday.

With a U.S. military helicopter shot down, oil should have surged. Instead, WTI crude plunged 3.93% to $87.73/barrel, while Brent fell 1.3% to $93.02/barrel. Three bearish factors converged: Trump and Vance’s “deal is imminent” statements suppressed war premiums; OPEC+ approved another 188,000 bpd increase in July production; and after last week’s unexpectedly strong jobs report, markets began worrying about Fed rate hikes dampening demand.

WTI breaking below $90 is a psychological threshold. The last time it stood at this level was shortly after the initial ceasefire in mid-April. If CPI data shows inflation cooling due to falling oil prices, this would provide the Federal Reserve with the ideal excuse to pause rate hikes.

Gold remained under pressure, holding near a two-month low of $4,300. Stronger dollar and elevated rate hike expectations weighed on safe-haven demand for precious metals. Silver edged up 0.81% to $68.90, supported by industrial demand.

Bitcoin fell to around $62,500, down 27% YTD toward 2026, having already halved from its all-time high. Spot BTC ETFs recorded net outflows for four consecutive weeks, totaling $5.4 billion withdrawn in the past month. Strategy (formerly MicroStrategy) plummeted 24.29% last week—the worst weekly performance since FTX’s collapse in November 2022—leaving even the most committed crypto bulls bleeding.

Outlook: CPI Day, June’s Most Critical 8:30

Tomorrow (Wednesday), U.S. 5-month CPI data will be released at 8:30 a.m. ET.

This data point is far more than a monthly economic indicator—it serves as the critical evidence market uses to answer key questions:

Has last week’s overheated job growth (172,000 new jobs) already fed into inflation? How deeply has rising oil prices from the Middle East conflict penetrated core inflation? Will the Fed maintain a dovish stance or pivot clearly hawkish at its June 16–17 meeting?

Markets currently price in a 70% chance of a December rate hike. If CPI comes in hotter than expected, that probability could surge toward 90%, triggering renewed selling pressure on the Nasdaq. Conversely, if CPI unexpectedly cools—especially core CPI declining—it would become the strongest catalyst for chip stocks to bottom out, potentially sparking a violent technical rebound driven by short-covering.

After-hours on Wednesday brings Oracle earnings—a key player in AI cloud infrastructure with over $500 billion in remaining performance obligations (RPO). Markets will scrutinize whether these contracts are translating into real revenue. Thursday features a triple threat: PPI, ECB interest rate decision, and OPEC monthly report.

Larger IPO events loom too. SpaceX is expected to price on June 11 and list on Nasdaq (ticker: SPCX) on June 12, with a valuation range of $1.75 trillion to $2 trillion. The FIFA World Cup kicks off in the U.S. on June 11.

But all of this waits until after tomorrow morning’s 8:30 release.

Over the past six trading sessions, the Nasdaq has fallen from a historical high of 27,094 to 25,679—down 5.2%. The VIX spiked from 16 to 19. The chip sector erased over $1 trillion in market cap. The Middle East ceasefire is effectively dead. Bitcoin halved. This is a market under broad stress.

Against this backdrop, a CPI reading below 4% would act like a powerful cardiac stimulant; a reading above 4.5% could mean last week’s sell-off was merely an appetizer.

At least today, one thing is clear: oil breaking below $90 indicates markets are pricing in peace. But whether peace can truly arrive depends on whether the Iran deal—promised to be “finalized in two or three days”—is yet another empty promise or finally real this time.

One hundred days. Markets are done guessing. They just want results.

Author: Tide Research