Oil at $93, AI wipeout pull S&P 500 to 5-week lows

Oil surged past $93 a barrel after President Trump warned Iran it would “pay the price” for stalled negotiations. That pushed Brent crude up 1.8% to $93.10, adding fuel to an already hot inflation picture. The Strait of Hormuz remains effectively shut to tankers, cutting off crude deliveries from the Persian Gulf.

AI stocks took a separate hit. Super Micro Computer tumbled 28% after saying it plans to raise $7 billion by selling common stock and convertible preferred stock. Dilution risk hit the hardest. Micron swung from a 4% opening loss to a brief gain, then settled back down 4.7%. Nvidia, the biggest S&P 500 weight, fell 3.7%. Broadcom dropped 5.1%. All told the S&P 500 lost 1.6%, the Dow fell 953 points (1.9%), and the Nasdaq slid 2%.

The two forces – oil and AI – are linked through yields. Higher oil prices feed into inflation. May CPI printed at the fastest pace in three years. Yet the 10-year Treasury yield barely moved, edging up to 4.54%. The two-year held at 4.13%. Traders saw the inflation data as in line with forecasts; the core month-over-month reading actually came in slightly better than expected. CME Group's FedWatch tool showed the probability of a rate hike this year unchanged.

The read for commodities goes beyond oil. If supply through the Strait of Hormuz stays interrupted, crude has room to run. That keeps input costs high for airlines and cruise operators – United Airlines fell 6.2%, Carnival 6.3%. On the other side, gold became an inflation hedge narrative again, though the metal barely moved in the session. AlphaScala gives NVDA an Alpha Score of 69/100 and SMCI 63/100, both in Moderate territory. CME Group scored 54.

Wednesday's sell-off wiped out five weeks of gains on the S&P 500. The next real test is whether the AI rout was a one-time positioning flush or the start of a broader unwind. For commodity traders, the Strait remains the dominant variable. No tankers are moving through. No talks are scheduled.