Market Overview
Weak June jobs data triggered a sharp repricing of Fed rate expectations lower, lifting risk assets and commodities while bruising the dollar—but corporate earnings surprises delivered mixed signals on AI's real-world payoff.
Nonfarm payrolls barely budged in June, adding just 57,000 jobs versus expectations of 115,000 (CNBC Economy). The unemployment rate fell to 4.2% but only because fewer people looked for work—labor force participation hit a three-year low. Prior months were revised sharply downward, suggesting the labor market has cooled far more than headline strength implied. Market traders instantly erased bets on a September rate hike, and stock futures soared on the signal that the Fed can stay on hold longer.
Spot gold jumped 1.4% Friday morning, setting up a 2.3% weekly gain—the first positive week since late May (CNBC). The metal had been battered all year by a strong dollar and hawkish central bank expectations, losing 22% from its January peak above $5,300. Weak jobs data reversed that narrative instantly; traders slashed September rate-hike odds from 65% to 53.5%, making gold's zero-interest-rate appeal shine again. Silver surged 2.9% to $62.77 per ounce alongside other precious metals, though strategists caution gold needs a more decisive pullback in real yields to sustain a recovery.
Christine Lagarde, president of the European Central Bank, told French media she would 'ask herself questions' about a potential early departure from her post (ends October 2027) and possible involvement in France's 2027 presidential race (CNBC Economy). She did not rule out backing a candidate or running herself. Her remarks come as far-right National Rally leader Jordan Bardella leads polls to replace Emmanuel Macron. Lagarde framed any move as a duty to defend France's place in Europe, but the ECB declined immediate comment; the euro sold off sharply in February on similar speculation.