DFG Navigator Archives | June 2026

Your Capital Markets Snapshot: Strong Jobs Report Ends the Rally and Raises Rate Hike Fears

US equity markets ended the week significantly lower, as a strong May jobs report on Friday triggered a broad selloff driven by rising expectations that the Federal Reserve may raise interest rates later this year. The S&P 500 fell 2.5% for the week as mega-cap technology names that had powered the index to record highs earlier in the week reversed course sharply. Treasury yields rose across the curve, with the front-end leading gains as the stronger-than-expected labor market data reinforced concerns that inflation, already elevated in part due to the ongoing conflict in the Middle East, may prove more persistent. WTI crude oil rose 3.6% on the week, supported by continued disruptions to supply through the Strait of Hormuz. The May Nonfarm Payrolls report showed the U.S. economy added 172,000 jobs—nearly double the consensus estimate of 88,000—while the unemployment rate held steady at 4.3%, marking the strongest three-month advance in hiring in more than two years. Taken together, last week's data painted a picture of a resilient but inflation-pressured economy, leaving investors navigating a more uncertain rate environment just as the AI-driven equity rally showed signs of fatigue.

Your Capital Markets Snapshot: Nine-Week Rally as Iran Ceasefire Sends Oil Tumbling

US markets extended their historic rally during the week, with stocks climbing to fresh records as optimism grew around a potential peace deal with Iran and artificial intelligence continued to drive corporate earnings growth. The S&P 500 rose 1.4% for the week, marking its ninth consecutive weekly advance—the longest winning streak since 2023 and a run matched only a few times in the past four decades. Treasury yields declined across the curve as reports of a tentative US-Iran ceasefire agreement eased inflationary pressures from energy markets. WTI crude oil plunged nearly 9% to close the week at $87.95 per barrel as markets priced in the potential reopening of the Strait of Hormuz. The April Personal Consumption Expenditures (PCE) price index — the Federal Reserve's preferred measure of inflation — rose 3.8% year-over-year, the highest reading since May 2023, driven by war-related energy price increases, while core PCE, which excludes food and energy, climbed 3.3% annually. Overall, markets navigated a complex environment where strong AI-driven earnings momentum offset persistent inflation concerns and geopolitical uncertainty, with investors increasingly confident that the economic expansion remains intact despite elevated energy costs.

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