Blowout May Jobs Report Reprices Fed Path; Tech Rout Wipes More Than $1 Trillion in a Day
According to Huo Xing Finance, U.S. nonfarm payrolls rose by 172,000 in May, far above the market consensus of 85,000. The surprise strengthened expectations that the Federal Reserve could tighten again, lifting the implied probability of a December rate hike to 63%. Several Fed officials also struck a hawkish tone.
The shift in rate expectations pushed the U.S. dollar index back above 100. Gold extended its slide for a fourth straight week. U.S. tech shares were hit hard on Friday: the Philadelphia Semiconductor Index sank 10% in a single session, wiping out more than $1 trillion in market value.
Geopolitical risk remained elevated this week. U.S.-Iran talks were reported to be stalled over issues tied to frozen assets. Iran warned it would expand the range of its strikes if the conflict intensifies. A draft proposal on managing the Strait of Hormuz has entered a review stage, while conditions in Lebanon continue to deteriorate.
In capital markets, SpaceX said it will list on Nasdaq on June 12 at an offering price of $135 per share. The deal is expected to raise $75 billion, implying a valuation close to $1.8 trillion. The S&P 500 is not expected to add the stock quickly, as index rules require at least 12 months of public trading and four consecutive quarters of GAAP profitability.
On the regulatory front, Futu, Tiger Brokers and Changqiao Securities said that starting June 12 they will suspend new purchases and fund transfers for existing mainland China clients, leaving only portfolio management and selling functions as part of industry rectification compliance.
In Japan, the Bank of Japan has signaled a strong bias toward further tightening. Markets are pricing a policy rate increase to 1% at the June meeting, which would be the highest level since 1995. Overnight swap pricing points to more than an 80% chance of a hike.
World Gold Council data showed central banks returned to net gold buying in April. The People's Bank of China added 8 metric tons, extending its streak to 18 consecutive months of increases, while Poland's central bank topped global purchases with 14 metric tons.
On the tech front, Alphabet said it is raising its fundraising target to $84.75 billion from $80 billion to speed up AI infrastructure buildout, with Berkshire Hathaway participating in a $10 billion private placement. At COMPUTEX 2026, NVIDIA CEO Jensen Huang unveiled the RTX Spark superchip, saying "the PC is undergoing its first major transformation in 40 years" as the company goes all-in on the Windows AI PC and agent-based AI era.
