Weekly Market Highlights
- Financial Markets: The US Dollar trended upwards, with significant declines in gold and silver following strong US jobs data. Oil saw a modest rise, while non-US currencies exhibited mixed performance. US equities experienced a sharp downturn, particularly in the technology sector.
- Economic Outlook: US jobs data significantly exceeded expectations, increasing anticipation for Federal Reserve interest rate hikes.
- Geopolitics: Continued tensions in the Middle East, with stalled ceasefire talks between Iran and the US, and escalating conflict in Lebanon.
- Key Sectors: The technology sector saw a substantial decline, alongside Nvidia's announcements of new AI partnerships. SpaceX's IPO generated significant market interest.
- Investment Perspectives: Financial institutions anticipate continued Dollar strength, with differing outlooks on gold and oil.
In-depth Market Analysis
US Dollar and Commodities: Driven by Data and Geopolitics
The US Dollar Index navigated a choppy upward trajectory throughout the week. Friday's significantly stronger-than-expected US Non-Farm Payrolls data fueled a surge in market expectations for Federal Reserve interest rate hikes, propelling the index to trade just above the 100-mark. In contrast, spot gold experienced a volatile consolidation, plummeting to $4327.77 per ounce post-NFP release, marking its fourth consecutive week of losses. While geopolitical news provided some support for safe-haven demand, an overall recovery in risk appetite limited gold's potential for unilateral upside. Silver followed a similar pattern to gold but exhibited slightly higher volatility, dipping to around $67.55 per ounce mid-week and closing the week down 9.85%.
International crude oil, however, registered a modest gain this week, poised for its first weekly rise in three weeks. Fluctuations were primarily influenced by expectations of easing geopolitical tensions, shipping, and inventory data. A moderation in risk aversion sentiment dampened the oil price premium previously driven by safe-haven flows. The absence of clear signals of supply tightening prevented oil from sustaining its earlier rapid ascent.
Major Currencies and Equities: Divergent Performance Amidst Monetary Policy Focus
Non-US currencies broadly maintained narrow trading ranges against the US Dollar. The Euro and Sterling primarily traded within ranges against the greenback. The Japanese Yen faced the most pressure, with USD/JPY repeatedly touching near the 160 level, reigniting market attention on potential Japanese authorities' intervention.
In the US stock market, the Dow Jones Industrial Average refreshed its record closing high mid-week. Following the Non-Farm Payrolls report on Friday, US technology stocks experienced a sharp sell-off. The Dow closed down 1.35%, the S&P 500 fell 2.65% (its largest single-day drop since October 2025), and the Nasdaq declined 4.18% (its largest single-day drop since April 2025). The Philadelphia Semiconductor Index plunged 10%, erasing over $1 trillion in market value in a single day, with NVIDIA (NVDA.O) down over 6%.
Expert Views and Investment Insights
Various financial institutions offered diverging perspectives on market direction. CITIC Securities noted a significant weakening of dovish forces within the Federal Reserve. Capital Economics suggested that market concerns about a broad tightening by global central banks might be overstated.
Goldman Sachs opined that greed currently outweighs fear in the market. Deutsche Bank highlighted the market's heightened sensitivity to any negative news involving Iran. HSBC maintained that gold remains an effective hedge and diversification tool. Meanwhile, Commerzbank lowered its price target for gold to $4800 per ounce and also revised down its silver target to $80 per ounce.
Regarding commodities, CITIC Securities anticipates copper prices could challenge $15,000 per ton within the year. China Securities recommended an allocation to commodities and gold. For oil, Goldman Sachs posited that prices face a tug-of-war between weakening demand and Middle East supply disruptions, implying two-way risk. Barclays maintained its Brent crude forecast of $100 per barrel for 2026, noting that upside risks persist.
Key Events of the Week
1. US-Iran Ceasefire Talks Stall Amidst Escalating Middle East Tensions
The Middle East remained a focal point of tension this week, with ongoing negotiations between Iran and the US over nuclear issues and regional military actions, yet no de-escalation in military confrontation. Latest developments indicate President Trump is committed to an Iran deal, claiming Iran agreed to forgo nuclear weapons and is open to meeting with the Supreme Leader. He emphasized that a naval blockade on Iran is "more impactful than bombing" and could potentially last until Labor Day, though he deemed it unlikely, suggesting joint US-Iran efforts to extract nuclear materials. On Friday, CNN reported an advisor to Iran's Supreme Leader stated that a peace agreement hinges on the US unfreezing $24 billion in Iranian assets, with talks at a stalemate.
Iran seeks phased asset release, while the US fears weakening its leverage. The advisor denied any potential meeting between Trump and Mojtaba, while warning that if the US resumes military action, Iran would expand the war to the Indian Ocean, Red Sea, and Mediterranean, though he assessed war probability as low.
Iranian officials had previously indicated readiness to negotiate with the US if necessary, outlining a four-phase plan for an agreement, but financial compensation emerged as a key sticking point. Earlier, Tehran criticized the US draft agreement for omitting the disposal of uranium materials and noted frequent shifts in the US position.
On the military front, Iranian media claimed a strike on a US warship near its territorial waters in the Oman Gulf, equipped with a "command and control center," which US Central Command denied. The IRGC Navy warned that only Iranian-designated routes are safe for passage in the Persian Gulf, and any violation would be targeted. Iran's Foreign Ministry accused Kuwait and Bahrain of direct responsibility for US attacks and denied firing on Kuwait's airport.
Regarding the Strait of Hormuz, Iran's Supreme Leader approved the formation of a working group, with media reports suggesting the management draft is under review. Iran previously opened permit applications for safe passage, with over 300 non-Iranian vessels applying, mostly oil tankers. US forces have been blockading Iranian port traffic since April 13, paralyzing 6 related merchant ships and forcing over a hundred to reroute, a blockade President Trump stated would continue. The UAE plans to construct an oil pipeline bypassing Hormuz.
Conflict escalation continued on the Lebanon front. Israeli Prime Minister Netanyahu stated alignment with Trump on Iran and preparedness for full escalation, claiming Israel had "eliminated" approximately 20 Iranian nuclear scientists. The Israeli Chief of Staff declared no ceasefire for the IDF in Lebanon.
Iran's Foreign Minister warned of a decisive response if Israel attacks Beirut. Israel, in turn, alleged Hezbollah's continued violation of ceasefire agreements, launching missiles and drones at Israeli communities, while Hezbollah stated it would not accept a "partial ceasefire." Al Arabiya reported that the coming hours would be decisive for Lebanon-Israel negotiation prospects, with US Secretary of State Rubio expected to participate.
Nuclear risks remain high. A report from the International Atomic Energy Agency indicated that the risk of Iranian nuclear proliferation is higher than pre-Trump strike levels. Iran's Parliament Speaker stressed that no agreement would be ratified without safeguarding citizens' rights, with officials stating Iran has received no commitments from the US on the nuclear issue.
Regional security and diplomatic adjustments were significant. Kuwait expelled two Iranian diplomats, Bahrain prohibited its citizens from traveling to Iran and Iraq, and the Houthi movement declared support for Iran's rights. The US House of Representatives passed a symbolic resolution limiting Trump's war powers, and Rubio reiterated that US military operations against Iran had concluded. Trump stated no ground troops were needed, but the situation could persist for two to three weeks.
2. "SPCX" to Debut on Nasdaq June 12 at $135 Per Share
Nasdaq is set to welcome one of the largest IPOs in history. SpaceX plans to list on June 12, 2026, under the ticker "SPCX." Based on the $135 per share indicative price, the company aims to raise $75 billion initially, with the potential to reach $86.25 billion if underwriters exercise their overallotment options, setting a new global IPO record.
The offering features a dual-class share structure, with the company intending to issue approximately 555.6 million Class A ordinary shares. Following a 5-for-1 stock split in May 2026, the post-offering structure is expected to comprise about 7.38 billion Class A shares and 5.96 billion Class B shares, with each Class B share carrying 10 votes. At the offering price, SpaceX's post-IPO market capitalization is estimated at $1.765 trillion, and its fully diluted valuation at $1.785 trillion.
Equity-wise, Elon Musk, through his personal and trust entities, holds 849 million Class A shares and 5.219 billion Class B shares, representing 91.6% of all Class B shares. Post-IPO, Musk will control 82.4% of the aggregate voting power, maintaining absolute dominance. Class B shareholders can independently elect 51% of the board seats. Musk serves as CEO and Chairman, with his removal requiring a majority vote from Class B shareholders.
Listing lock-up arrangements are distinctive. Musk and the core management team have committed to a full 366-day lock-up, with approximately 60% of shares subject to no early release. Other shareholders face phased releases: 20% can be unlocked after earnings reports; an additional 10% upon a 30% stock price rise from the offering price; and the remaining shares will be gradually unlocked on a calendar schedule from day 70 to 180.
To facilitate the listing, Nasdaq has granted waivers for certain rules, including the 10% free-float requirement, allowing inclusion in the Nasdaq 100 index 15 trading days post-listing. Approximately $75 billion in free-float market cap will be factored into index construction with a 3x multiplier, anticipating around $8 billion in passive index buying in the first week. However, the S&P 500 index has refused rapid inclusion, requiring at least a 12-month listing history and four consecutive quarters of GAAP profitability, making SpaceX eligible for entry earliest after June 2027.
3. US Non-Farm Payrolls Greatly Exceed Expectations; Fed Officials Signal No Rate Cuts Soon, Raising Hike Risks
The US Non-Farm Payrolls data for May, released by the Bureau of Labor Statistics, significantly surpassed expectations. Subsequently, markets began pricing in a Fed rate hike before January next year, with the probability of a December hike jumping from 48% to 63%. Analyst Anstey of a prominent institution stated that this report could undermine the rationale for Fed rate cuts in the coming months.
Data revealed that seasonally adjusted Non-Farm Employment increased by 172,000, against market expectations of 85,000. March figures were revised up to 214,000, and April from 115,000 to 179,000, with a combined upward revision of 93,000 for the first two months. The job gains over the past three months represent the strongest performance in over two years. The unemployment rate held steady at 4.3% for the second consecutive month, in line with expectations.
The White House lauded the data and refuted claims that job strength fuels inflation, with President Trump stating "economic growth doesn't mean inflation." Hassett urged the Fed to observe and noted room for rate cuts.
Less than two weeks before the June policy meeting, Fed officials made numerous statements this week. Unlike earlier in the year when rate cuts were the focus, discussions within the Fed since June have clearly shifted towards the duration of high rates and the necessity of further policy tightening.
Markets widely anticipate the Fed will maintain the federal funds rate target range unchanged at its June meeting, with officials' commentary on future policy paths becoming more cautious, even hawkish.
Following the NFP release, Fed official Hamak commented on interest rate policy, stating that the labor market is nearing balance, and the 4.3% unemployment rate meets his definition of full employment. He deemed maintaining stable rates appropriate currently but cautioned that if the trend continues, a hike might be needed soon.
New York Fed President Williams stated this week that current monetary policy is in an "appropriate position" and no immediate rate adjustment is necessary. He believes the US labor market is generally balanced, long-term inflation expectations are stable, and the rise in energy prices due to the Middle East situation is primarily a short-term shock unlikely to alter the long-term inflation trend. He also noted that AI-related investments continue to support economic growth.
In contrast, Dallas Fed President Logan delivered a more hawkish signal. She suggested that current interest rates may be insufficient to effectively curb demand, and if inflation persists above target, the Fed might need to raise rates further later this year. Logan views the US labor market as robust, supported by the AI investment boom and relatively loose financial conditions, with limited progress on disinflation.
In addition to Logan, several officials expressed concerns about inflation risks. Cleveland Fed President Hamak indicated that if inflation does not significantly improve in the coming months, the Fed may need to tighten policy further to prevent the re-anchoring of high inflation expectations.
Kansas City Fed President Schmid noted that the Fed's current choices are increasingly boiling down to "patience" versus "suppressing inflation through rate hikes." He pointed out that the current inflation rate of approximately 3.5% is still a considerable distance from the 2% target.
San Francisco Fed President Daly was more moderate. She suggested that AI could boost productivity and have a deflationary effect in the long run, but its impact on inflation in the short term is not yet significant, with recent price increases driven more by energy, food, and tariffs.
Furthermore, the Fed's Beige Book released this week indicated that economies in 10 districts expanded modestly to moderately, consumer spending showed a K-shaped divergence, and Middle East conflicts exacerbated inflation through higher energy costs, straining corporate profit margins. Employment remained in a "low hiring, low firing" stalemate, with future business expectations hampered by uncertainty.
4. Futu, Tiger, and Changqiao Unify Actions, Suspending In-bound Trading and Deposits for Mainland Accounts from June 12
Following the announcement of related adjustment plans by Tiger Brokers International and Changqiao Securities, Futu Securities also informed its existing clients in mainland China about service adjustments on June 4.
According to Futu's announcement, to implement the two-year rectification requirements set by industry regulators and promote the standardized development of cross-border securities business, existing investors in mainland China will have their ability to buy (open positions) stocks and all other products, as well as deposit funds, suspended starting June 12, 2026. However, selling (close positions) and position inquiry functions will remain available. Futu stated that this adjustment will not affect the services it provides to existing investors overseas.
With the phased implementation of rectification measures, several cross-border online brokerage firms have begun executing similar arrangements. This week, Tiger Brokers International and Changqiao Securities successively issued announcements adjusting trading and fund transfer services for existing clients in mainland China, retaining only position management and exit channels, and no longer supporting new fund inflows or increased trading volumes.
All three institutions have proactively signaled their commitment to rectification. Futu reported that the proportion of mainland asset clients has decreased to 13%, with overseas business unaffected. Tiger Brokers has ceased new account openings and advertising in mainland China since 2023, with mainland client assets accounting for approximately 10% of global total assets. Changqiao emphasized that client funds are segregated and held by licensed Hong Kong institutions, and pledged strict adherence to rectification requirements.
5. Surge in Rate Hike Expectations; Bank of Japan May Raise Policy Rate to 1% in June
Amidst renewed Middle East geopolitical tensions driving energy price shocks, the Bank of Japan is signaling its strongest policy tightening to date. Multiple sources indicate that at its upcoming monetary policy meeting on June 15-16, BOJ officials will discuss a proposal to raise the benchmark interest rate by 25 basis points to 1.0%.
If adopted, this decision would not only bring Japan's short-term policy rate to its highest level since 1995 but also signify a significant acceleration in Japan's normalization of its tightening pace after exiting its ultra-loose policy cycle in 2024. Currently, overnight swap markets show investors pricing in an over 80% probability of a June rate hike.
BOJ Governor Kazuo Ueda completed a crucial narrative shift in a public speech this week. He explicitly stated that if the risk of prices rising beyond expectations outweighs the negative economic impact of geopolitical conflicts, the central bank would need to consider raising rates. This final key remark ahead of the policy meeting has been widely interpreted by the market as a "substantive signal" for a June rate hike.
However, extreme uncertainty surrounding the Middle East situation remains the final variable. Informed sources suggest that if geopolitical conflicts escalate sharply before the meeting and trigger severe global financial market turmoil, the central bank might adopt a wait-and-see approach at the last moment. But barring such extreme shocks, a June rate hike appears virtually certain.
6. Global Central Banks Resume Gold Purchases in April; Poland and China Lead as Top Buyers
In April, global central banks reverted to net gold purchases. Latest data from the World Gold Council (WGC) shows that central banks collectively bought a net 17 tons during the month, ending a net selling trend of nearly 30 tons in March.
Poland's central bank was the largest buyer in April, acquiring a net 14 tons, marking it as the top central bank buyer for the month. Year-to-date, Poland has bought a total of 45 tons, increasing its gold reserves to 595 tons, or approximately 30% of its total reserves.
The People's Bank of China (PBoC) purchased a net 8 tons in April, its highest monthly purchase volume since December 2024. Total official gold reserves rose to approximately 2,322 tons, representing about 9% of its total reserves. This marks the 18th consecutive month of gold accumulation by China.
The Czech National Bank continued its steady pace of accumulation, buying a net approximately 2 tons in April, marking its 38th consecutive month of increases. Its gold reserves climbed to 79 tons, or 6% of total reserves.
Turkey, the largest seller in March, stabilized in April with gold reserves remaining nearly flat. The WGC explained that weekly data indicates Turkey's maturing short-term gold/USD swap contracts were settled in April, leaving only longer-term contracts of one to three months yet to mature.
The Central Bank of Russia continued to reduce its gold holdings, selling a net 6 tons in April, its fourth consecutive month of net sales. Year-to-date, Russia has sold a total of 22 tons of gold. The Central Bank of Uzbekistan saw a slight net sale of 1 ton in April, but remains a net buyer year-to-date, having acquired 24 tons, ranking second globally only to Poland. Its gold reserves stand at approximately 414 tons, representing 88% of its total reserves.
7. Alphabet Launches Epic Equity Financing, Upsizing to $84.75 Billion
The AI arms race is pushing tech giants' capital hunger to unprecedented heights. Alphabet, Google's parent company, announced an ambitious $80 billion equity financing plan this week. Due to robust market demand, just two days later, Alphabet announced it was increasing the financing size to $84.75 billion.
The most significant aspect of this financing is the substantial commitment from "The Oracle of Omaha's" empire. Alphabet has agreed with Berkshire Hathaway to sell $10 billion of its stock through a private placement. In fact, Berkshire had been secretly building its Alphabet stake since Q3 2025 and doubled its holdings last month to approximately $16.6 billion.
The financing structure also includes other components: First, the public underwriting portion, initially planned for $30 billion, was expanded to $34.75 billion due to oversubscription. This includes $18 billion in Class A and C ordinary shares, plus $1.675 billion in depositary shares for mandatory convertible preferred stock. This offering is led by Goldman Sachs, JPMorgan Chase, and Morgan Stanley, with the first tranche of approximately $45 billion priced and allocated this week.
Second, the remaining $40 billion will be raised through a novel "at-the-market" (ATM) program, involving a "drip"-style dilution offering in the public market starting in Q3 2026.
Alphabet's management has clearly defined the use of these vast funds. The $40 billion from the ATM program is designated for specific administrative purposes, primarily to implement a "sell-to-cover" administrative reform addressing tax obligations arising from employee stock incentive vesting.
The remaining nearly $45 billion, raised through public underwriting and Berkshire's private placement, will be directly channeled into expanding its world-class AI computing infrastructure and global computing power.
8. Jensen Huang Announces 'First PC Redesign in 40 Years'; NVIDIA Bets on Windows AI PCs
This week, NVIDIA founder and CEO Jensen Huang, in his keynote address at COMPUTEX 2026, unveiled the new "RTX Spark" super chip for personal computers and confirmed that the next-generation data center architecture, "Vera Rubin," has entered full production. This marks NVIDIA's formal, aggressive entry into the Windows AI PC market and a full pivot towards the era of "Agentic AI."
In the consumer and edge market, NVIDIA is partnering with Microsoft to revolutionize the PC ecosystem. The newly launched RTX Spark super chip, co-developed with MediaTek, is specifically designed to run on-device AI agents. It integrates a Blackwell RTX GPU with 6144 CUDA cores and a 20-core Grace CPU, delivering up to 1 Petaflop of AI computing power and 128GB of unified memory.
Huang declared this represents "the first PC redesign in 40 years," envisioning future computer interactions shifting from traditional "click and type" to directly expressing intent to AI, with agents autonomously executing tasks. Major manufacturers such as ASUS, Dell, HP, Lenovo, Microsoft Surface, and MSI are already developing related products, with the first wave of Windows laptops and desktops featuring this chip expected to launch this fall.
On the enterprise infrastructure front, Huang announced that the highly anticipated "Vera Rubin" platform has achieved full production, with customers expected to begin receiving shipments in the third quarter of this year. Huang emphasized that Vera Rubin is the company's most ambitious plan to date for "Agentic AI" workloads, which involve multi-step reasoning and tool invocation. The platform integrates components including the Rubin NVL72 system, the new Vera CPU, and the Spectrum-6 Ethernet switch.
Additionally, NVIDIA released new open-source physical AI tools for industrial digitization and robotics. These include Cosmos 3, an open-source multimodal large language model featuring a "Hybrid Transformer" architecture, integrating visual reasoning, world generation, and motion prediction; and Alpamayo 2 Super, a 32 billion parameter inference LLM for closed-loop training and simulation of autonomous ride-hailing vehicles.
Addressing industry concerns about widespread AI-driven job displacement, Huang publicly refuted the notion in his speech, calling the idea that "AI will reduce software engineer jobs" completely "absurd." He believes that with the advancement of Agentic AI, the number of software developers will actually increase, as AI enhances employee productivity, stimulating software companies to utilize more tools and thus creating greater development opportunities.
EN
