8th June 2026

U.S.

Stock Market Performance:

• Major U.S. stock indexes finished the week lower, reversing part of their recent gains.

• Declines were led by the technology-heavy Nasdaq Composite, which fell 4.68%.

• The Russell 2000 Index also declined over the week.

• The S&P 500 Index recorded its first weekly loss since March.

• The Dow Jones Industrial Average proved the most resilient of the major indexes, slipping just 0.32%.

• Early optimism surrounding artificial intelligence (AI) stocks faded as the week progressed.

• Investors became increasingly cautious amid volatility in oil prices linked to developments in the Middle East.

• Elevated earnings expectations for AI-related companies prompted concerns that valuations had become stretched.

• A growing pipeline of AI-related equity issuance also weighed on sentiment.

• A stronger-than-expected U.S. payrolls report supported confidence in the economy but increased expectations that interest rates could remain higher for longer.

• Investors worried that persistent inflationary pressures may prevent the Federal Reserve from easing monetary policy in the near term.

Labour Market and Employment Data:

• The closely watched nonfarm payrolls report significantly exceeded expectations.

• The U.S. economy added 172,000 jobs during May.

• Economists had forecast approximately 80,000 new jobs.

• April payroll figures were revised higher to 179,000 from the originally reported 115,000.

• Employment growth was strongest in leisure and hospitality, local government, and healthcare sectors.

• The unemployment rate remained unchanged at 4.3%.

• The U.S. Department of Labor reported that job openings rose to 7.618 million in April.

• This was substantially above expectations of approximately 6.79 million vacancies.

• The number of job openings reached its highest level in nearly two years.

• Private payroll processor ADP reported that private employers added 122,000 jobs during May.

• The ADP figure also exceeded consensus expectations.

• Initial jobless claims rose to 225,000 during the week ended May 30.

• Claims increased by 13,000 from the previous week.

• This represented the highest weekly level since early February.

• Consulting firm Challenger, Gray & Christmas reported that announced job cuts rose for the third consecutive month.

• Planned layoffs increased 16% from April to approximately 97,000.

• Companies identified AI adoption as the leading reason for workforce reductions for the third consecutive month.

Business Activity and Inflation Pressures:

• Economic data generally suggested that the U.S. economy remained resilient despite ongoing inflation concerns.

• The Institute for Supply Management manufacturing Purchasing Managers' Index (PMI) rose by 1.3 points to 54.0 during May.

• The reading exceeded market expectations and reached its highest level in four years.

• New manufacturing orders expanded for the fifth consecutive month.

• The manufacturing prices index eased modestly but continued to signal rising input costs for the 20th consecutive month.

• The ISM services PMI increased to 54.5 from 53.6.

• The services reading also exceeded consensus forecasts.

• New orders strengthened within the services sector.

• The services prices index climbed to its highest level since August 2022.

• Employment components within both ISM surveys remained in contraction territory.

• PMI surveys from S&P Global painted a slightly more mixed picture.

• Manufacturing activity remained robust, while services growth was more subdued.

• Both S&P Global surveys nevertheless highlighted elevated price pressures.

• The Federal Reserve’s Beige Book reported increased economic activity across 10 of its 12 districts.

• The report stated that prices continued to increase at a moderate to strong pace overall.

Bond Markets and Federal Reserve Outlook:

• U.S. Treasury bonds generated losses during the week.

• Treasury yields moved higher across most maturities.

• Strong economic data, oil price volatility, and hawkish Federal Reserve commentary contributed to rising yields.

• Investors increasingly believed that inflation risks could keep monetary policy restrictive for longer.

• The yield on the benchmark 10-year U.S. Treasury note rose from 4.44% to approximately 4.55% by Friday afternoon.

• Investment-grade corporate bonds also declined in value.

• Corporate bonds underperformed Treasuries despite strong demand for new issuance.

• T. Rowe Price traders noted that year-to-date corporate bond issuance has reached its fastest pace since 2020.

• Sentiment within high-yield bond markets remained mixed but broadly constructive.

• High-yield markets were periodically affected by oil price swings, geopolitical tensions, and changing interest rate expectations.

Europe

Stock Market Performance:

• The STOXX Europe 600 Index declined 0.53% in local currency terms.

• European markets lacked a clear direction throughout the week.

• Investors assessed the likelihood of successful negotiations between the U.S. and Iran.

• Market participants also monitored the possibility of a ceasefire between Israel and Lebanon.

• Additional uncertainty emerged following the Trump administration's announcement that new tariffs ranging from 10% to 12.5% could be imposed on many countries.

• Germany's DAX fell 1.38%.

• France's CAC 40 Index rose 0.43%.

• Italy's FTSE MIB declined 0.29%.

• The UK's FTSE 100 Index slipped 0.40%.

Eurozone Economic Growth:

• Final data from Eurostat showed that the eurozone economy contracted during the first quarter.

• Gross domestic product declined by 0.2%.

• This represented a downward revision from the initial estimate of 0.1% growth.

• Ireland experienced the steepest decline among eurozone economies.

• The Irish economy contracted by 12.1% during the quarter.

Consumer Spending and Retail Activity:

• Eurozone retail sales volumes declined by 0.4% in April.

• The fall was primarily driven by weaker non-food sales.

• Economists had expected a smaller decline of 0.3%.

• Retail sales in Germany fell by 0.2%.

• Spanish retail trade declined by 1.5%.

• France proved more resilient, with retail sales increasing by 0.3%.

France Economic Developments:

• French industrial production edged up by 0.1% month on month during April.

• This outperformed expectations for a 0.2% decline.

• Strong gains were recorded in the production of coke and refined petroleum products.

• Transport equipment manufacturing also contributed positively.

• France's trade deficit narrowed during April.

• Improving exports supported the reduction in the deficit.

• Strong export categories included transport equipment, mechanical products, electrical goods, electronics, and computer equipment.

UK Automotive Sector:

• Data from the Society of Motor Manufacturers and Traders showed that new car registrations rose by 7.1% year over year during May 2026.

• This represented the strongest May performance since 2019.

• Petrol vehicle registrations declined by 7.1%.

• Diesel registrations fell by 2.2%.

• Plug-in hybrid vehicle registrations surged by 23.9%.

• Battery electric vehicle registrations increased by 34.2%.

• Electric vehicles continued to drive overall growth within the UK automotive market.

Japan

Stock Market Performance:

• Japanese equity market performance was mixed during the week.

• The Nikkei 225 Index gained 0.39%.

• The broader TOPIX Index declined 0.20%.

• Investor sentiment remained cautious.

• Markets closely monitored the fragile ceasefire between the U.S. and Iran.

• Elevated energy prices kept inflation risks firmly in focus.

• Concerns surrounding future interest rate policy also influenced investor behaviour.

• The yield on the 10-year Japanese government bond remained broadly unchanged at 2.66%.

Bank of Japan Policy Outlook:

• Comments from Bank of Japan Governor Kazuo Ueda increased expectations of a potential June interest rate increase.

• Ueda indicated that responding to inflation risks should remain a priority.

• He acknowledged downside risks to economic activity.

• However, he stressed the importance of guarding against significant upside inflation surprises.

• He suggested that policymakers should fully assess the merits of raising rates if inflation risks outweigh growth concerns.

• Supply disruptions arising from Middle East tensions were identified as an important consideration.

Wages and Consumer Spending:

• Nominal average wages increased by 3.5% year over year.

• Wage growth exceeded consensus forecasts of 3.2%.

• March wage growth was revised higher to 3.1%.

• Real, inflation-adjusted wages rose for a fourth consecutive month.

• Government petrol subsidies helped moderate inflationary pressures.

• Household spending remained weak.

• Consumer spending contracted by 0.5% year over year during April.

• However, the decline was less severe than expectations for a 1.5% contraction.

• April's contraction was also an improvement from March's 2.9% decline.

• Household spending has now fallen for five consecutive months.

Currency Developments:

• The Japanese yen weakened to around JPY 160 against the U.S. dollar.

• The currency had ended the previous week near JPY 159.2.

• The yen approached levels that have previously triggered official intervention.

• Finance Minister Satsuki Katayama issued fresh warnings regarding decisive action to support the currency.

• The rhetoric mirrored language used before earlier interventions.

• Ministry of Finance data confirmed that authorities conducted foreign exchange interventions totalling JPY 11.735 trillion.

• The interventions amounted to approximately USD 73.6 billion.

• The interventions took place between April 28 and May 27.

China

Stock Market Performance:

• Chinese equities ended the week lower as investors assessed signs of an uneven economic recovery.

• The CSI 300 Index fell 1.54%.

• The Shanghai Composite Index declined 1.00%.

• Hong Kong's Hang Seng Index dropped 0.88%.

• Technology-related gains helped limit losses within Hong Kong markets.

• Investor focus remained centred on economic data and developments within China's AI sector.

Economic Activity and PMI Data:

• China's official manufacturing PMI eased to 50.0 during May from 50.3 in April.

• The reading suggested that factory activity lost momentum.

• Manufacturing activity remained exactly at the threshold between expansion and contraction.

• The private-sector RatingDog China General Manufacturing PMI remained more resilient.

• The survey, compiled by S&P Global, registered 51.8.

• The divergence highlighted stronger performance among smaller and privately owned firms.

• The official PMI places greater emphasis on larger state-owned enterprises.

• The private survey captures a broader range of smaller businesses.

• The mixed results reinforced expectations that policymakers may continue favouring targeted support measures over broad stimulus programmes.

Artificial Intelligence Developments:

• Investors remained focused on the commercialisation of artificial intelligence technologies within China.

• Tencent Holdings is reportedly testing an embedded AI agent within WeChat.

• WeChat is China's largest social media and payments platform.

• Regulatory approval for the technology could begin as early as this month.

• Tencent's Hong Kong-listed shares rose following the reports.

• Chinese AI start-up DeepSeek is reportedly exploring a fundraising round.

• Media reports suggested that the company could be valued at approximately USD 52 billion.

• Neither DeepSeek nor potential investors have publicly confirmed the fundraising plans.

• The developments reinforced optimism regarding the commercial application of AI technologies across China.

Other Key Markets

Colombia:

• Colombian financial markets rallied following the first round of the presidential election.

• Right-wing candidate Abelardo de la Espriella performed better than expected.

• He finished ahead of left-wing candidate Iván Cepeda.

• The two candidates will compete in a presidential runoff election scheduled for June 21.

• Investors interpreted the outcome as increasing the likelihood of a more market-friendly policy environment.

• Expectations included greater fiscal discipline and improved relations with the private sector.

• Political uncertainty nevertheless remains elevated.

• Cepeda secured a substantial share of the vote.

• Polling trends, endorsements, voter turnout, and economic policy proposals could continue influencing markets.

• According to T. Rowe Price Sovereign Analyst Christopher Mejia, markets are likely to remain sensitive ahead of the runoff.

• Equities advanced during the week.

• The Colombian peso strengthened against the U.S. dollar.

• Local government bond prices rose as yields declined.

• Higher oil prices also supported sentiment, given oil's importance to Colombia's export revenues and tax receipts.

• The longer-term fiscal benefit from stronger oil prices will depend upon production levels and government spending discipline.

Indonesia:

• Indonesia was among the weakest-performing markets in Asia during the week.

• Investors focused on currency weakness, elevated oil prices, and increasing economic policy uncertainty.

• Higher oil prices raised concerns regarding inflation, fuel subsidy costs, and pressure on Indonesia's external balances.

• Investors also assessed revisions to financial-sector legislation.

• The changes broadened the mandate of Bank Indonesia to include support for economic growth.

• Parliament was also granted a larger oversight role.

• Indonesian equities declined throughout the week.

• Markets experienced a particularly sharp sell-off on Wednesday following renewed U.S.-Iran military exchanges.

• Indonesian stocks ended the week at their lowest level in four years.

• The Indonesian rupiah weakened to record lows.

• Currency weakness increased concerns regarding import costs and energy prices.

• Investors also worried about the ability of borrowers to service U.S. dollar-denominated debt.

• Market pricing suggested that investors are waiting for clearer signs of currency stability, fiscal discipline, and consistent policymaking before adopting a more positive outlook towards Indonesian assets.

PLEASE NOTE:

This content is for informational purposes only and should not be construed as investment advice or a specific recommendation to act on any investment. It is importnat to assess your own circumstances before making investment decisions. The views expressed are as of the date indicated and whilst we believe the information is from reliable sources, we do not guarantee it’s accuracy. Past performance is not indicative of future results, and all investments carry market risks, including the potential loss of the principal.