A week that began in euphoria ended in anxiety. Technology stocks surged to fresh records in the first half as Nvidia unveiled a new artificial-intelligence chip for personal computers, lifting the broader semiconductor complex and carrying the S&P 500 above 7,600 for the first time. The mood shifted abruptly on Friday when the U.S. Bureau of Labor Statistics reported 172,000 new jobs in May — nearly double the consensus estimate of 85,000 — with the unemployment rate holding at 4.3%. In a market already wary of stubborn inflation, the data reawakened fears that the Federal Reserve could resume raising rates, producing a classic "good news is bad news" reversal across virtually every asset class.

Equities

The S&P 500 ended the week at 7,384, surrendering a new all-time high set just three sessions earlier. The Nasdaq Composite bore the brunt of the repricing, falling 4.2% on Friday alone — its steepest single-day decline since the tariff turbulence of April 2025 — to close the week off 4.7% at 25,709. Nvidia's early-week surge of more than 6% on the chip announcement was followed by broad semiconductor selling as investors reassessed valuations. A secondary equity offering from Meta compounded the technology headwinds. In Europe, the STOXX 600 lost 0.5% and Germany's DAX fell 1.4%. Japan's Nikkei 225 eked out a 0.4% gain, supported by a weaker yen, while the Hang Seng slipped 0.9% on softer global demand concerns.

Rates & Credit

The payrolls surprise triggered a sharp repricing in sovereign debt. The U.S. 10-year Treasury yield climbed six basis points on Friday to 4.54% — its highest since late May — as markets began pricing at least one additional Fed hike before year-end. The target range stands at 3.50–3.75% after three consecutive pauses. German Bund yields rose to 3.04% in tandem, with eurozone inflation having climbed to 3.2% in May, complicating the ECB's calculus. Investment-grade and high-yield credit spreads widened modestly into the weekend, reversing the tightening seen earlier in the week.

Foreign Exchange

The dollar strengthened broadly on the payrolls data. EUR/USD fell toward 1.160, from above 1.163 at the start of the week, as rate-cut expectations were pushed further out. The Japanese yen outperformed after Japan's Finance Minister reiterated readiness to take "appropriate action" in foreign exchange markets, keeping intervention risk front of mind. Sterling softened following weaker-than-expected U.K. services PMI data, and the Swiss franc drew modest safe-haven flows as risk appetite deteriorated on Friday.

Commodities & Gold

Oil sold off on Friday, with Brent retreating roughly 2% to around $93 a barrel and WTI declining 3% to approximately $90. Middle East tensions had lent some support through the week, but demand worries dominated once the labour-market data reset the macro narrative. Gold had its worst week since March, declining nearly 4% to around $4,366 per troy ounce as rising real yields and a firmer dollar combined to pressure the metal. Copper drifted lower, reflecting softening industrial activity expectations.

The Week Ahead

The agenda is dense. U.S. May CPI arrives on June 10, followed by PPI on June 11; both will be parsed carefully given Friday's payrolls surprise. The ECB is widely expected to raise rates by 25 basis points to 2.25% on June 11, testing whether President Lagarde can tighten further without widening peripheral spreads. The Federal Reserve's next meeting falls on June 16–17; with inflation above 3.9% and the labour market firm, markets will focus on any shift in the rate-path guidance. Middle East geopolitical developments remain a latent risk for energy prices.