US EQUITY OPEN: Stocks hit as tech rout continues

Open: Stocks have opened lower, with losses led by the Nasdaq as technology continues to come under pressure following Broadcom's (AVGO) earnings earlier in the week. The semiconductor complex is seeing heavy selling, with the Semiconductor ETF (SOXX) down 6% and the Memory ETF (DRAM) down 10%, giving back a sizeable portion of their recent gains.

US indices are lower across the board, although sector performance is more mixed. Technology is leading the downside, while Energy and Industrials are also underperforming. On the flip side, Consumer Staples, Health Care, Real Estate and Utilities are outperforming in a typical defensive rotation amid the broader weakness in equities.

The stronger-than-expected US payrolls report had little impact on equity futures at the time, with the tech and AI narrative dominating equity price action. On the data, the US economy added 172k jobs in May, well above the 85k forecast, while the prior two months were revised notably higher. The unemployment rate was unchanged at 4.3%, reinforcing the view that the labour market remains resilient. The data has pushed Treasury yields higher across the curve, particularly in the front-end, as traders increase Fed rate hike expectations.

In FX, the Dollar is outperforming alongside the stronger payrolls report, while the Canadian Dollar is also benefiting from a stellar domestic employment report. The Antipodes are the clear laggards amid the stronger Dollar and weaker risk sentiment. The Yen saw a sharp bout of strength immediately after payrolls, although the move swiftly pared, prompting some intervention and/or rate-check speculation.

Crude prices are lower despite the stronger payrolls report, with markets focused on conflicting headlines surrounding Iran negotiations. Initial reports suggested Iran had agreed to transfer its uranium reserves to a third country, although Fars News later denied the claim. Elsewhere, Iran's Navy said it fired warning missiles towards US destroyers in the Gulf of Oman, but US CENTCOM denied the report. Al Arabiya also reported that the US continues to reject releasing Iran's frozen funds.

The softer crude prices are weighing on Energy stocks, while gold and silver are also lower amid the stronger Dollar backdrop.