Global macro markets experienced sharp volatility this week following the release of stronger-than-expected U.S. employment data. Nonfarm payrolls that beat expectations shifted market sentiment regarding the U.S. Federal Reserve’s (Fed) interest rate policy and triggered a sharp sell-off in technology stocks.
Non-farm employment in the U.S. increased by 172,000 in May, far exceeding the market expectation of 85,000. After the data was released, investors began to reprice the Fed’s monetary policy outlook. While the probability of a rate hike in December rose to 63%, hawkish comments from Fed officials also supported these expectations. With the impact of these events, the U.S. Dollar Index rose back above the 100 level, while gold prices closed lower for the fourth consecutive week.
Changes in interest rate forecasts placed particular pressure on technology stocks. In Friday’s sell-off, the Philadelphia Semiconductor Index fell 10% in a single day, and US technology companies saw a combined loss of over $1 trillion in market value.
On the geopolitical scene, tensions in the Middle East continued to run high. Talks between the US and Iran have stalled due to a disagreement over the release of frozen assets, while Iran issued a warning that it could escalate its attacks in the event of a potential conflict. The introduction of a bill regarding the control of the Strait of Hormuz and the worsening security situation in Lebanon also heightened risk perceptions in the region.
Meanwhile, in the financial markets, all eyes were on SpaceX’s initial public offering (IPO). The company announced that it would begin trading on the Nasdaq on June 12 and target to raise $75 billion from the offering, priced at $135 per share. These figures bring the company’s valuation to approximately $1.8 trillion. However, the S&P 500 administration refused to include the company in its fast-track inclusion program. For SpaceX to be included in the index, it will need at least 12 months of trading history and must show profitability according to GAAP standards for four consecutive quarters.
In Asia, expectations that the Bank of Japan will resume interest rate hikes have gained momentum. Market participants are expecting the bank to raise its policy rate to 1% at its June meeting. If such a move does take place, interest rates in Japan will reach their highest level since 1995. The probability of an interest rate hike in the overnight swap markets has risen above 80%.
Central bank purchases drew attention in the gold market. According to World Gold Council data, global central banks became net buyers of gold again in April. The People’s Bank of China added 8 tons of gold to its reserves during this period, marking its 18th consecutive month of purchases. Meanwhile, the National Bank of Poland took the top spot globally with a purchase of 14 tons.
Artificial intelligence investments in the technology sector continue unabated. Alphabet announced that it has raised its financing round from $80 billion to $84.75 billion to speed up its artificial intelligence infrastructure investments. It was also reported that Berkshire Hathaway participated in a $10 billion private placement.
On the other hand, Nvidia CEO Jensen Huang introduced the RTX Spark superchip at the COMPUTEX 2026 event. Huang stated that personal computers are undergoing the biggest transformation in the last 40 years, stressing strong investment strategies for Windows-based AI computers and agent-based AI technologies.
