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Stronger-than-expected U.S. May nonfarm payroll data boosted expectations for rate hikes, intensifying global market volatility

Global markets faced a critical data shock last week: U.S. May nonfarm payrolls rose by 172,000, exceeding market expectations and fueling expectations of a Federal Reserve rate hike. All three major U.S. equity indices closed lower, with the Nasdaq posting a weekly decline of 4.68% and the Mag 7 stocks all falling. Meanwhile, compounded by OPEC+ raising output targets for the fourth consecutive month and Iran’s proposal to introduce a Strait of Hormuz toll regulation, global asset price volatility surged significantly.

Content compiled by 'Harbor Family Office,' a subsidiary of Henry Jia Group. It does not constitute any investment or trading advice. Stay tuned.

Hot Topics >>>

– U.S. May nonfarm payrolls rose more than expected, fueling market expectations of a rate hike

Last week, U.S. nonfarm payrolls increased by 172,000 in May, significantly exceeding the market forecast of 85,000 by some analysts. This marks the third consecutive month of substantial job growth, while the U.S. unemployment rate remained steady at 4.3% for the third straight month, indicating a gradual recovery in the labor market. Following the release of the May jobs data, market expectations for a Federal Reserve rate hike this year intensified, leading U.S. equities to end their weekly winning streak amid rising rate-hike concerns.

– OPEC+ raises oil production targets for the fourth consecutive month

On Sunday, OPEC+ agreed to raise its oil production targets for the fourth consecutive month, with core members deciding to increase the target output from July onward by 188,000 barrels per day.

– Iran’s Vice President says draft of 'Hormuz Strait Environmental Services Fee Regulation' has been prepared

On June 7 local time, according to Iran’s Tasnim News Agency, Vice President Hojjatollah Ansari stated that Iran has initiated work on drafting the 'Hormuz Strait Environmental Services Fee Regulation.' A preliminary draft of the regulation has already been completed, though the fee structure and specific collection mechanisms have not yet been finalized. Ansari added that the regulation covers environmental fees as well as maritime security, safety services, and environmental services provided to transiting vessels.

– Jensen Huang and SK Group Chairman Chey Tae-won to announce partnership on Monday

On June 7 local time, Jensen Huang held another ‘fried chicken dinner’ in Korea—his first in seven months—meeting with SK Group executives including Chairman Chey Tae-won. Huang later told reporters that NVIDIA’s collaboration with SK Group will span multiple areas, including AI supercomputers, central processing units (CPUs), next-generation PCs, and robotics technology, with specific details expected to be announced the following day (Monday). When asked about the global memory chip shortage, Huang noted that the situation is likely to persist for several more years, primarily due to strong market demand.

Stock Market >>>

– U.S. Markets: Stronger-than-expected jobs data triggers volatility; all three major U.S. indices decline

The U.S. May nonfarm payroll data released last Friday significantly exceeded expectations, heightening market concerns about a potential Federal Reserve rate hike this year. Combined with weaker-than-expected AI-related earnings from Broadcom and news of SpaceX’s upcoming IPO, tech stocks sold off sharply, dragging down major U.S. indices. All three major U.S. stock indexes closed lower, with the Nasdaq falling more than 4%, as risk-off sentiment intensified in the market.

As of Friday's market close, the Dow Jones Industrial Average fell 1.35% to 50,866.78 points, posting a weekly decline of 0.32%; the S&P 500 dropped 2.64% to 7,383.74 points, down 2.59% for the week; the Nasdaq Composite plunged 4.18% to 25,709.432 points, marking a weekly loss of 4.68%. The Philadelphia Semiconductor Index slid 10.26% on Friday to close at 12,220.76 points.

The Mag 7 index declined 3.35% on Friday, with all constituent stocks ending lower. Tesla fell 6.56%, NVIDIA dropped 6.20%, Meta lost more than 5.5%, Amazon declined 3.06%, Microsoft slipped 2.66%, Apple decreased 1.25%, and Google A fell nearly 1%. The Nasdaq Golden Dragon China Index dropped over 3.5% to 6,362.57 points, down 3.40% for the week; Baidu plunged 9.7%, and Pony AI tumbled 9.2%. Among individual stocks, tech shares broadly declined: Circle fell 11.33%, Qualcomm dropped nearly 11%, Oracle declined 9.59%, TSMC fell 6.66%, and Broadcom slid nearly 8%.

– European Markets: European equities edged lower on Friday, ending the week mixed overall.

European stocks generally declined modestly on Friday, ending the week mixed. The pan-European STOXX 600 index closed down 0.29% at 622.66 points on Friday, posting a weekly loss of 0.53%; the STOXX 50 index fell 0.68% to 6,062.07 points on Friday but gained 0.19% for the week.

Germany's DAX index declined 0.75% to 24,759.05 points on Friday, down 1.38% for the week; France's CAC 40 dropped 0.32% to 8,218.24 points, rising 0.43% weekly; the UK's FTSE 100 edged up 0.07% to 10,368.05 points, falling 0.40% for the week; Italy's FTSE MIB index slipped 0.56% to 49,893.05 points, down 0.30% on the week.

– Asia-Pacific Markets: Major Asia-Pacific equity markets broadly declined on Friday, with South Korea’s benchmark index plunging over 5.5%.

On Friday, major Asia-Pacific stock markets opened lower and continued to decline throughout the session, with South Korea’s benchmark index closing down over 5.5% and briefly falling nearly 7% intraday, triggering a circuit breaker. As of Friday’s close, Japan’s Nikkei 225 dropped 1.31% to 66,588.12 points; South Korea’s KOSPI plunged 5.54% to 8,160.59 points. Singapore’s Straits Times Index fell 0.40% to 5,047.28 points; Thailand’s SET Index declined 0.76% to 1,582.60 points. Australia’s S&P/ASX 200 dropped 0.70% to 8,625.10 points.

– Hong Kong Market: Hong Kong stocks opened lower and extended losses, with all three major indices closing in the red.

Hong Kong stocks opened lower and trended downward on Friday, with all three major indices closing lower and posting divergent weekly performances. At the close, the Hang Seng Index fell 1.15% to 24,961.95 points; the Hang Seng Tech Index dropped 1.75% to 4,888.39 points; and the Hang Seng China Enterprises Index declined 0.77% to 8,436.63 points. In sector performance, shipping and container freight stocks strengthened amid peak season demand: Lojan Logistics rose 7.30%, and COSCO Shipping Holdings gained 6.68%. Memory chip stocks saw significant declines: Montage Technology fell 9.21%, GigaDevice dropped over 8%, and Winstar Holdings slid 5.42%. PCB-related stocks also declined: Sunway Technology plunged 11.18%, Kingboard Laminates fell 8.24%, and both Kingboard Group and Guanghe Technology dropped over 6%.

– A-Share Market: Mainland China’s A-share market ended lower in volatile trading, with the ChiNext Index falling over 3%.

On Friday, mainland China's A-share market turned lower intraday and traded volatile throughout the session, with all three major indexes closing in the red. The Shenzhen Component Index fell more than 2%, and the ChiNext Index dropped over 3%. At the close, the Shanghai Composite Index declined 0.74% to 4,027.74 points; the Shenzhen Component Index fell 2.21% to 15,314.70 points; and the ChiNext Index slid 3.20% to 3,957.94 points. In sector performance, robotics-related stocks surged notably, with Lide Harmonic hitting a 20% daily trading limit, Zhongkong Technology rising 13.10%, Cixi Shares up 12.83%, and Colier among others reaching their daily trading limits. Chip and semiconductor stocks broadly declined, with GoodWe down 13.03%, Viteo falling nearly 13%, Zhongjing Electronics dropping 9.32%, and Biwin Storage and Longsys both sliding more than 8.5%. The commercial aerospace sector gained support ahead of SpaceX’s upcoming IPO, with Chuangyuan Xinke surging nearly 30%, StarNet Control up 14.76%, and Yuhan CNC and Zhongtian Rocket hitting their daily trading limits. Cultured diamonds, power, and supercapacitor sectors underperformed.

Bond>>>

– U.S. Treasuries: Treasury yields rose on Friday, with the 2-year yield climbing over 10 basis points.

On Friday, U.S. Treasury yields rose following strong nonfarm payroll data, with the 2-year yield up 10 basis points to 4.139%, and the 10-year yield rising approximately 5 basis points to 4.520%.

– Non-U.S. bond markets: Eurozone government bond yields continued to rise last week, with Germany’s 10-year Bund yield gaining over 10 basis points for the week.

On Friday, Germany’s 10-year Bund yield rose 1.6 basis points to 3.038%, up 10.1 basis points for the week; the 2-year Bund yield climbed 3.1 basis points to 2.692%, rising 16.3 basis points over the week. The UK’s 10-year Gilt yield increased by 0.5 basis points to 4.903%, up 9.1 basis points for the week; the 2-year Gilt yield also rose 0.5 basis points to 4.338%, gaining 12.6 basis points over the week.

– Government bonds: Treasury futures declined across the board on Friday.

On Friday, Treasury futures declined across the board. At the close, the front-month 30-year contract fell 0.27%, the 10-year contract dropped 0.05%, the 5-year contract slipped 0.02%, and the 2-year contract declined 0.01%.

Foreign Exchange>>>

– U.S. Dollar: The ICE U.S. Dollar Index rose above the 100 mark, while the Japanese yen fell about 0.1%.

At Friday’s foreign exchange market close, the ICE U.S. Dollar Index rose 0.66% to 100.92, gaining 1.15% for the week; the Bloomberg Dollar Spot Index advanced 0.62% to 1,212.23, up 1.13% over the week.

At the foreign exchange market close, USD/JPY rose 0.11% to 160.19 yen, gaining 0.57% for the week. EUR/USD fell about 0.8% to $1.1519.

– CNY: The offshore renminbi closed at 6.7907 per US dollar.

At the end of trading in New York last Friday, the US dollar traded at 6.7907 against the offshore renminbi, up 138 pips from the previous session’s close; the onshore renminbi closed at 6.7712 per US dollar, up 56 pips from the prior session’s close.

– Digital Assets: Digital asset prices were volatile last week, with Bitcoin down more than 16% over seven trading days.

Digital asset prices declined at the end of New York trading last Friday, continuing a weak trend throughout the week. Bitcoin closed down approximately 3.7% on Friday, bringing its cumulative loss over the past seven trading days to about 16.3%; Ethereum closed down around 9.7%, with a nearly 20% decline over the past seven trading days.

Products>>>

– Energy: US crude oil futures prices rose then pulled back last week.

Oil prices rose then retreated last week, with mid-week volatility triggered by Iran-related news. As of the New York close, US crude oil futures settled down 2.69% at $90.54 per barrel.

– Precious Metals: Precious and base metals declined with volatility last week, with silver down approximately 10% for the week.

Gold:Gold prices continued to fall following the release of the US May nonfarm payrolls data. At the end of New York trading last Friday, spot gold fell about 3.3% to $4,328.70 per ounce, marking a weekly loss of approximately 4.6%; US gold futures dropped around 3.3% to $4,354.60 per ounce, for a weekly decline of about 4.75%.

Metals Futures Market:Spot silver fell approximately 8% last Friday to $67.9295 per ounce, down nearly 10% for the week; US silver futures plunged about 8% to $68.025 per ounce, down roughly 10.4% on the week. US copper futures declined 4.1% to $6.2630 per pound, down approximately 2.05% for the week; spot platinum dropped 6.1%, down 7.3% for the week; spot palladium fell 6.45%, down nearly 10% on the week.

[Disclaimer]

The above content is provided by Harbor Family Office (hereinafter referred to as "Harbor Family Office"), summarized from various market information sources. Harbor Family Office and its group members did not participate in preparing the content nor explicitly or implicitly endorse it. This article is for reference only and does not constitute any investment or trading advice. Investment involves risks. Readers should independently assess and judge this material and are advised to seek professional opinions before making any related investments or trades. Without authorization, no one may reproduce, copy, or publish this content in whole or in part to the public in any manner. Copyright belongs to Harbor Family Office and related providers.

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