May housing starts fell short of forecasts while crude prices declined over $4 on Iran supply resumption expectations.
US housing starts reached 1.177 million in May, below the 1.430 million estimate, signaling a weaker-than-expected construction sector. Import prices rose 1.9%, exceeding the 1.0% forecast, adding to inflation concerns ahead of the FOMC decision.
Oil prices extended losses, with WTI crude down $4.12 to $76.63, as reports suggested Iran may resume oil sales immediately. The API inventory data showed a significant drawdown, but markets focused on potential supply increases. US 10-year yields dipped 3 bps to 4.44%, while the S&P 500 and Nasdaq fell 0.6% and 1.1%, respectively.
The broader market reaction remained muted despite oil’s 4.5% decline. The XLE energy ETF dropped just 0.3%, while tech stocks led losses, with Intel down 8% and Micron falling 6%. The EUR strengthened, while the CHF lagged, and gold rose $26 to $4,333.