Are Markets At A Precarious Tipping-Point?

追加: 2026-06-07

[00:00:00]Today, our markets at a precarious tipping point.

[00:00:14]Hello again, it's Martin North from Digital Finance and Analytics. This is our weekly market update where we start in the US across Europe and nation, end in Australia, and we cover commodities and crypto along the way. We got a bit of taste at the end of the week as the Nasdaq composite fell more than 4% on Friday after May's US payrolls data came in far stronger than expected, boosting the case for an interest rate hike. Gold slumped and volatility spiked higher. A reported surge in demand for shares in SpaceX, which is set for its trading debut next week, has already received orders for more than the shares available in its $75 billion US initial public offering, according to Bloomberg.

[00:00:54]And it's also was linked to the selling wave that swept through some of tech's higher flyers, including Marvel Technology. but it won't get a special pass into the indices for at least a year or so according to reports which may crimp demand from index funds.

[00:01:11]Meantime, the Iran US conflict negotiations are deadlocked with more skimmishes and complexity thanks to the situation in Lebanon. The straits are still constrained, although some cargo is getting through. But economies are running on empty as energy production remains below current demand and inventories are running down thanks to the conflict as illustrated by the jet fuel inventory depletion in Europe which says within a couple of months things will get critical. The clocks are indeed ticking down. So we have an unprecedented investment in AI related activity, allowing entrepreneurs to monetize their investments, but which may potentially drive interest rates and inflation higher, putting more pressure on ordinary people as little of this wealth creation will find its way to them. And meantime, financial players are spruing the latest opportunities. Be aware of those talking heads. Remember, debt has grown to unprecedented levels with household debt, company, and government debt all rising in a one-way move. So, as we consume energy beyond production capacity, we're seeing a simultaneous depletion of buffers across the board. This is a signal beyond the noise. So, we should expect more market volatility as we saw this week with the MSCI global index down 2.27% on Friday.

[00:02:35]While the all country Asia excluding Japan fell 7.09% and the stock 600 in Europe slid just 0.23%.

[00:02:43]The ASX 200 in Australia was down 0.7% taking the decline for the week to 1.2% and Bitcoin briefly slid below $60,000.

[00:02:54]At the close in New York, the Nasdaq was 4.2% lower. The S&P 500 dropped 2.6% and the Dow lost 1.4%. Though while the S&P 500 snapped its 9week winning streak, the benchmark is still up about 8% so far in 2026, including a 16% rebound since his late March low for the year.

[00:03:15]The volatility index was up 40.6% on Friday to 21.57.

[00:03:22]That's a new one-mon high. Tech caught the worst of the selling on Friday.

[00:03:26]Information technology sector fell 5.8%.

[00:03:29]The Philadelphia Semiconductor Index closed down 10.3% suffering its largest 1-day percentage plunge since March 2020, raising more than1 trillion off market stock valuations. Among the biggest high-tech losers on Friday were Marvel Technology shed 16.7% pairing its 5-day advance to just 32% and its 1-month advance to 56%.

[00:03:54]Talk about a bowl. The Magnificent 7 were also hit. All seven closed in the red. Tesla fell 6.6%, Nvidia dropped 6.2% and Meta fell 5.5%.

[00:04:06]Meta, by the way, is considering selling equity after Alphabet successful 85 billion US sale this week. That's according to the Financial Times. In the past, the end of bull markets are heralded by disappointing growth, extremely elevated equity issuance, and tighter Fed policy. Does that sound familiar? The US jobs market jolted the market, too, as the economy adds 132,000 jobs last month, well above the 50,000 to5,000 range expected. Total non-farm payroll growth was also revised higher for March and April by a combined 93,000 jobs. The jobless rate held at 4.3% for the third consecutive month. This speaks to a hotter economy, perhaps an overheating one, and rate rise expectations from the Fed rose as a result. But the latest figures, of course, could be revised later. Data coming on the heels of other positive indicators on the labor market this week suggests that the maximum employment part of the Federal Reserve dual mandate is under control and the inflationary side is the bigger concern with oil prices still elevated and price pressures increasing the strong jobs report also likely rules out interest rate cuts for the time being. In fact, traders on Friday increased their odds of a rate hike this year after the data came out. Trump later in a press gaggle praised the job numbers. "I'm going to let Walsh make the decision about rates.

[00:05:34]I'd like to see low interest rates," the president said when asked whether the Fed would cut rates at its next meeting.

[00:05:41]"The rise in rate hike bets also made government debt less attractive with investors dumping bonds, which boosted Treasury yields. A quarter point rate hike is now being fully priced in by the end of the year. The 10-year was last at 4.534% while the 2-year was at 4.147%.

[00:05:59]Higher rate environment of course tend to lift the dollar. The US dollar surged to a near two-month high on Friday and posted gains for the week, helped by the lack of progress in peace efforts in the Middle East and the strong labor market data that strengthened expectations for interest rate hikes. It was last at 100.07.

[00:06:18]Looking at other major currencies, the euro was down 0.7% to 1.1524.

[00:06:25]The sterling fell 0.7% to 1.3337, while the Japanese yen continued to weaken and topped the key 16 level. Gold futures fell more than 3% to 4,365, while Brent oil was last at $92.78, reflecting market views that the US and Iran will reach some sort of agreement to get oil flowing again. Huh, we'll see about that. European stock markets edged broadly lower on Friday as investors gauge renewed uncertainty about the tensions in the Middle East and a moderate cooling in the redhot AI trade.

[00:07:01]The pan European stock 600 slid by 0.3%.

[00:07:05]The DAX in Germany fell 0.7%. The footsy in the UK was 0.1% higher though as British stocks reversed earlier losses on Friday despite a pullback later in the session. Although the benchmark posted a second straight weekly decline and the CAC 40 in France declined 0.3%.

[00:07:23]Keeping a lid on equities with Eurozone government bond yields which rose for the first weekly increase since May along with caution around a US Iran peace agreement yields in the region were lifted by a strong US employment report which bolstered bets on a potential Federal Reserve interest rate hike later in the year. Euro stat data earlier showed that gross domestic product fell 0.2% in the Euro zone in the first quarter of 2026, reversing a gain of 0.2% recorded in the fourth quarter last year. The decline was mainly driven by a 12.1% plunge in Ireland's GDP. Ireland's GDP can be volatile, of course, due to the country's number of multinational corporations. In the first quarter, exports and pharmaceutical stockpiling slowed, pulling down economic output.

[00:08:14]And more broadly, international trade, which has been hindered by the Middle East crisis. Shares of Dutch semiconductor equipment provider ASML fell by 2.6%. While Infon in Germany sank by 8.3% and STM Micro Electronics in France retreated 5.7%. Although Raspberry Pi jumped after the chip designer lifted its fullear profit forecast, citing solid AI related demand. The Bank of England's May decision maker panel published on Friday showed UK businesses now expect year-end inflation to be at 3.7% and their own prices to rise by 4% over the next 12 months. That's up 0.6 percentage points from February's reading. The survey of just over 2,000 chief financial officers found 57% expected to raise prices in response to the energy shock, though that was down 7 percentage points since April and 68% expected profit margins to be lower.

[00:09:13]Annual wages growth came in at 4.2% for the 3 months to May, while employment growth remained in negative territory at 0.3%.

[00:09:21]That reading sits alongside Friday's Halifax house price index for May, which showed average UK property values slipped a second consecutive month by just a little, 0.1% to 298,86 with annual growth of just 0.5%.

[00:09:39]Asian stocks mostly retreated on Friday as investors locked in recent profits in the technology sector pivoted into more economically sensitive names. This trend saw Japanese and South Korean markets clock deep losses, especially as chipmaking and AI shares extended recent declines. Japanese shares were also pressurized by increasing speculation that the Bank of Japan will raise interest rates later this month.

[00:10:04]Uncertainty over the US Iran war also remained in play amid little progress towards a comprehensive peace deal. I mean renewed to this is in the Middle East. South Korea's Cosby was by far the worst performer in Asia, losing around 6% as local chip makers fell sharply.

[00:10:21]Samsung Electronics and SK Hinx sank over 8% each, although they did recoup some of their initial losses later in the day. South Korean markets were also spooked by Labour Minister Kim Yun Hun telling Reuters that the country's biggest tech firm should share more of their artificial intelligence profits with suppliers, subcontractors, and workers who had helped broke a lastminute pay deal between Samsung and a major union helping avert a strike and delivering bumper payouts to the company's memory chip workers. Japan's Nikai 225 also underperformed, losing 1.6%. 6% on losses in local tech and chipm names. The sector had a strong runup in recent weeks on optimism over AI. Of course, chip and AI majors included SMCO, Ibiden and Renaissus Electronics Corp. They were the worst performers on the Nikai that brought the topics in that was flat on Friday, aided by gains in industrials and consumer stocks. Japanese markets were also pressurized by increased speculation over a Bank of Japan rate hike in June, especially after the governor signaled earlier this week that the central bank will discuss raising rates later in the month. Japan's 10-year bond was last at 2.652%.

[00:11:42]Strongly expected wage data for April released on Friday did point to the Bank of Japan having more headroom to raise rates. Wages and inflation are the central bank's two main considerations for rates. Of course, broader Asian markets were also mostly lower. Hong Kong's hanging index fell 0.8% pressurized by losses in tech while China's Shanghai shzen CSR 300 and Shanghai composite indices kept in a tight range. Indian stocks were lower at the close with the Nifty 50 down 0.21% 21% to a new one-mon low following the Reserve Bank of India's rate decision as the RBI's rate panel voted unanimously to keep the policy repo rate unchanged at 5.25%.

[00:12:29]Australian shares fell on Friday as iron ore dropped to a 3-month low, dragging down the major miners and offsetting CSL's best day in more than four years as investors rotated into healthcare stocks. The SX 200 lost 0.7% to 8,625 taking the decline for the week to 1.2%.

[00:12:50]The benchmark iron ore price in Singapore fell to a 3-month low of just around 100 US a ton on Friday with rising supply including from Guiney's pedal skill simuum mine and weaker seasonal steel demand weighing on prices.

[00:13:11]In materials Fordscq fell 2.3% to $2053.

[00:13:15]BHP fell 2.5% to $6124 and Rio Tinto was down by 1.9% to $184.58.

[00:13:22]Pantoro Gold dropped 5.7% to $264 and Belleview Gold fell 5.5% to $1.38.

[00:13:31]Banks remained soft over concerns about the housing market and falling demand for loans. Commonworth Bank raised 1.7% to $160.90.

[00:13:40]Westpack was down 1.2% to $3481.

[00:13:43]National Australia Bank fell 1.1% to $3659 and ANZ was down 1% to $3412.

[00:13:50]McCory was last at $23642.

[00:13:54]Energy was weighed down by Woodside Energy which fell 1.3% to $3.91 as oil held steady at 95 US or below as ceasefire talks between the US and Iran showed no progress. Investors instead continued a rotation into the defensive healthc care space with embattled biotech CSL rising 5.8% to $97.91 in its biggest 1-day gain since February 2022. Shares in the bluechip company fell 25% in May after it downgraded its earnings. ResMed rose 4.3% to $764 and Cockleia rose 5.6% 6% to $10045 after it too was punished back in May. In company news, Megaport advanced 11.3% to $1848 as it resumed trading following a $518 million equity raising to invest in Nvidia chips as part of an artificial intelligence push. City also upgraded the group's target share price by 41%.

[00:14:58]Technology 1 was last at $32 33. Worth rose 1.2%. 2% to $3569 after chairman Scott Perkins purchased $140,000 worth of shares in the supermarket giant this week. And NIB rose 2.5% to $659 after it sold its remaining Australian and New Zealand travel insurance businesses for $50 million to Aliance.

[00:15:23]Resolute Mining dropped 5% to a$1.13 as it expects June quarter production at its Syiana mine in Marley to fall to about 30,000 ounces from earlier forecasts of 40,000 to 45,000 ounces after security related supply chain disruptions delayed access to higher grade ore. And Amesworth Game Technology rallied 16.8% at 8% to $160 after the chairman Danny Gladstone and company secretary Mark Ludski resigned following reports regarding historical personal payments. The Aussie 2-year bond was last at 4.65% up for the week while the 10-year was at 4.94% with markets backing a no change decision from the RBA's June meeting with the peak rate now at 4.59% by the end of the year. The Aussie fell to 70.45 US cents and was at 52.79 UK pence. The world's largest cryptocurrency on Friday plunged to its lowest level since October 2024 and briefly slipped under the 60,000 US level. A strong May jobs report boosted expectations for interest rate hikes which weighed on Bitcoin already pressurized by steep institutional outflows. Crypto has also been weighed down this week after top corporate Bitcoin holders Strategy sold some of its holdings for the first time since late 2022 and it brought a shift towards artificial intelligence stocks.

[00:16:57]Cryptocurrency firm Coinbase and Strategy fell 7.1 and 6.9% respectively weighed by Bitcoin's 4.1% drop. Bitcoin was last 61,274.

[00:17:09]It early hit a session low of 59,159 down around 16% across the week amid pressure from continued institutional selling which was directed mainly at spot exchange traded funds. Bitcoin's ETFs were nursing an outflow of $1.4 billion this week, their fourth consecutive week of $1 billion worth of outflows. Institutional selling came amid heightened broader risk aversion spurred chiefly by uncertainty over the US Iran war. Military action between the two restarted over the past week. Of course, while reports showed Tran halted indirect negotiation with Washington, institutional selling was also in part driven by investors increasingly favoring AI stocks over non-uling crypto assets. And there's also anticipation of bumper initial public offerings from SpaceX and from AI majors Open AI and Anthropic which drummed up sentiments towards that sector. Beyond institutional selling, retail investors also appear to be largely averse towards Bitcoin. Coin Glass's Bitcoin Coinbase premium index, which measures Bitcoin's spot price in the biggest US exchange in comparison to the global average, showed the crypto trading, the deep discount, and broader crypto prices tumbled on Friday, tracking the declines in Bitcoin. Well, number two, crypto ether stood 8.3% to 1,582 and was lower by about 20% for the week.

[00:18:32]And it also hit a 14-month trough. XRP lost 3.9% to 1.0969 0969 and has declined more than 50% for the week. Now ahead, the highlights in a relatively light week for data are NAB's monthly business survey and Westpak's latest confidence report.

[00:18:53]And the key overseas data will be the US May CPI on Wednesday and policy meters meeting Canada on Wednesday and the ECB on Thursday. The Bank of Canada is expected to hold rates steady while the ECB is expected to lift rates and China is set to release May trade data on Tuesday and May inflation data on Wednesday. SpaceX is expected to debut on Friday. Also on the tech schedule, Apple will host its key annual developers conference known as the WWDC on Monday and Taiwan Semiconductors is also going to report results on Wednesday. So, we're in this uncertainty period where frankly things look very wobbly indeed. But of course, people are going to be talking the markets higher, particularly around AI, even as everything else looks a bit well suspect. So, hang on to your hats and I think the next few weeks will indeed be very wobbly. I'm Martin North from Digital Finance Analytics. May thanks for watching and I'll see you again next time.

[00:20:13]Heat.

[00:20:15]Heat.