U.S. Job Growth Exceeds Expectations, Paving the Way for Fed Rate Increases

The U.S. economy added 172,000 jobs in May, surpassing economists' expectations of 85,000, signaling potential Federal Reserve interest rate hikes. The unemployment rate held steady at 4.3%, according to the Bureau of Labor Statistics.

This unexpected job growth has led to a rise in the yield on the 10-year Treasury to 4.52% and a decline in U.S. equity index futures, with the Nasdaq 100 index down by 1.2%. Meanwhile, Bitcoin traded lower, falling to around $61,900 as the cryptocurrency market faced significant losses.

In addition, oil prices dipped slightly to $94 per barrel, and gold prices dropped by 1.1%, settling at approximately $4,400 per ounce. Despite these fluctuations, the broader U.S. economy remains robust, with both the ISM Manufacturing PMI and ISM Services PMI exceeding expectations.

U.S. stocks have been on a remarkable upward trend, with the S&P 500 experiencing ten consecutive weeks of gains, up about 10% year-to-date. However, there has been a pullback in the semiconductor sector following Broadcom's disappointing earnings report regarding AI chip demand.