(June 8): Equities looked set for more losses after a tech-led sell-off on Wall Street last Friday and a robust jobs report fuelled expectations for an interest-rate hike by the US Federal Reserve (Fed).
Equity-index futures for the Nasdaq 100 dropped 0.5% after the underlying gauge had its biggest fall since April 2025 on Friday. Contracts for the S&P 500 fell 0.4%. The Nikkei in Japan and the Kospi index in South Korea, the world’s best-performing gauge this year on the back of a rally in artificial-intelligence shares, were also primed for losses.
Elsewhere, Brent crude oil jumped 3.5% to over US$96 a barrel as Middle East tensions flared again with Iran firing missiles at Israel. Gold slipped to about US$4,320 an ounce, while the dollar strengthened against most of its Group-of-10 peers.
Treasuries fell on Friday after the jobs report added to bets the Fed’s next rate move will be a hike. Bitcoin traded near US$62,000, after falling below US$60,000 for the first time since October 2024.
The concerted slide in stocks and bonds was the biggest setback in months for the latest leg of the bull market, which traces to the end of March when negotiations began in earnest to end the war in Iran. Amid concerns about inflation and elevated oil prices, investors have begun to question the sustainability of AI-driven gains, raising doubts about whether the rally has run too far, too fast.
“For us, we worry that it is likely the start of a meaningful decline, even if it’s not the end of this bull market,” wrote Matt Maley, the chief market strategist of Miller Tabak. “For the longer term, we believe that we are in a major bubble that will end very badly eventually.”
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On Friday, Wall Street’s historic weekly run came to a halt as a sell-off in tech stocks gathered momentum. Stocks also face rising risk with mega AI deals ready to flood markets.
The Nasdaq 100 Index sank 4.8%, while growing anxiety about valuations sent the S&P 500 down 2.6%, with the index failing to complete a 10th straight week of gains. A gauge of chipmakers tumbled 10%.
The cooling enthusiasm for the AI trade, after powering markets to records, sent the Kospi lower by 5.5% on Friday. The gauge is still up over 100% this year.
See also: US stocks drift higher as chips rise, traders assess inflation
In geopolitical news, Iran fired several rounds of missiles towards Israel, as US President Donald Trump pushed to preserve a faltering ceasefire in the US’s 100-day conflict with Tehran. The US and Iran appear to be making little progress toward an interim deal to end the war Washington and Israel began about 100 days ago.
Another factor for investors to consider was a solid US jobs report.
While there was a lot to like in Friday’s economic data, the figures came at a time when inflation risks are challenging the Fed. US job growth topped all forecasts in May and the unemployment rate held steady at 4.3%, offering the clearest sign yet that the labour market may be breaking out of a prolonged period of lacklustre hiring.
Two-year yields, which are most sensitive to changes in US central bank policy, jumped 10 basis points on Friday to 4.15%. Interest-rate swaps indicated traders expect a quarter-point Fed hike by the December policy meeting, with a roughly 60% chance of a move in October.
Attention now turns to Fed policymakers’ next meet June 16-17 under the leadership of new chairman Kevin Warsh.
Uploaded by Isabelle Francis
