Stock Indexes Settle Mixed as Chipmakers Retreat
US Jun nonfarm payrolls rose +57,000, weaker than expectations of +113,000, and May nonfarm payrolls were revised lower to +129,000 from the originally reported +172,000. The Jun unemployment rate unexpectedly fell -0.1 to a 1-year low of 4.2%, signaling a stronger labor market than expectations of no change at 4.3%. US Jan average hourly earnings rose +0.3% m/m and +3.5% y/y, right on expectations. US weekly initial unemployment claims unexpectedly fell -1,000 to 215,000, showing a stronger labor market than expectations of an increase to 218,000. US May factory orders fell -1.3% m/m, a smaller decline than expectations of -2.0% m/m. Also, May factory orders ex-transportation rose +1.9% m/m, stronger than expectations of +1.0% m/m and the biggest increase in more than 4 years. Italy's May unemployment rate unexpectedly fell -0.1 to a record low of 5.0% (data from 2004), showing a stronger labor market than expectations of no change at 5.1%. The markets are discounting an 18% chance of a +25 bp rate hike at the next FOMC meeting on July 28-29. T-notes recovered from early losses on Thursday amid signs of a slowdown in the US labor market after Jun nonfarm payrolls rose less than expected and May nonfarm payrolls were revised lower. T-notes also found support on Thursday's decline in WTI crude oil to a 4.25-month low, which lowers inflation expectations. The 10-year German bund yield rose to a 1-week high of 2.929% and finished up +2.6 bp to 2.904%. The 10-year UK gilt yield rose +1.9 bp to 4.776%. BOE Governor Andrew Bailey said interest rate cuts are "off the table at the moment," as households have yet to feel the full effect of the Iran war. Swaps are discounting a 4% chance of a +25 bp ECB rate hike at its next policy meeting on July 23.
U.S. Jobs Increase by 57,000 in June, Missing Estimate for 110,000 (UPDATED)
The U.S. labor market cooled in June with employers adding 57,000 jobs, falling short of the 110,000 economists had expected and sharply decelerating from May's reading of 129,000. The unemployment rate edged down to 4.2%, below the 4.3% consensus. Average hourly earnings rose 0.3% on the month, matching the 0.3% expected, and were up 3.5% from a year earlier. Economists had looked for annual wage growth to quicken from 3.4% to 3.5%. The data is the first employment reading since the Fed's June 17 meeting, when Chair Kevin Warsh's committee held rates at 3.50% to 3.75% but turned its projections sharply hawkish. According to the CME FedWatch Tool, the probability of a rate hike at the Fed's July 29 meeting collapsed to about 22%, with a hold now the overwhelming favorite at 78%. The rate-sensitive 2-year Treasury yield fell to 4.121%, down about 5 basis points on the session, as hike bets unwound. WTI crude eased 0.59% to $67.47 a barrel. Gold surged 1.5% to around $4,124 an ounce on the prospect of a less aggressive Fed. The US dollar index slid 0.7% to 100.36.
President Donald Trump and Fed Chair Kevin Warsh Are on a Collision Course Over Interest Rates, and Things May Get Ugly for Wall Street
BREAKING: US May PCE inflation, the Fed's preferred inflation metric, rises to 4.1%, the highest reading since April 2023. Core PCE inflation rose to 3.4%, its highest since October 2023. US inflation is now officially running at more than double the Fed's 2% target. Persistently high prices are a burden for the American people. But the recent past need not be prologue. I am pleased to report that members of the FOMC are unambiguous and unanimous. This committee will deliver price stability. This commitment to price stability comes with two tailwinds. Firstly, the quarterly published Summary of Economic Projections (aka, the dot plot) showed that nine of 18 FOMC members, not all of whom vote, expect at least one rate hike before the year ends. "If Trump wants someone easy on inflation, he got the wrong guy in Kevin Warsh."
Wall Street Thinks Trumpflation Has Peaked, but There's an Unpleasant Surprise Looming for President Trump and Investors
Despite a wild ride in March, the first half of 2026 is shaping up as another stellar year for Wall Street. Through the closing bell on June 29, the Dow Jones Industrial Average (^DJI +1.14%), S&P 500 (^GSPC +0.00%), and Nasdaq Composite (^IXIC 0.80%) have risen by 9%, 9%, and 11% year-to-date, respectively. But what we've witnessed on the inflationary front in recent months isn't healthy or welcome. In February, the U.S. Bureau of Labor Statistics reported trailing 12-month (TTM) inflation of just 2.4%. Though this figure was modestly impacted by the price stickiness of Donald Trump's tariffs in the goods sector, all signs pointed to inflation heading toward the Fed's long-term target. The subsequent reaction in energy markets was impossible to miss. Crude oil prices soared by close to 70% in a matter of weeks, while gas prices increased at the fastest pace in more than three decades. This rapid climb in energy commodities almost singlehandedly sent TTM inflation soaring. Between February and May, inflation jumped from 2.4% to a three-year high of 4.2%. BREAKING: US May PCE inflation, the Fed's preferred inflation metric, rises to 4.1%, the highest reading since April 2023. -- The Kobeissi Letter (@KobeissiLetter) June 25, 2026 Core PCE inflation rose to 3.4%, its highest since October 2023. US inflation is now officially running at more than double the Fed's 2% target. Very hawkish dot plot. -- Nick Timiraos (@NickTimiraos) June 17, 2026 Nine out of 18 officials have at least one hike this year (and six of those 9 have multiple hikes). Only one person has a cut this year, and one participant (presumably Warsh) didn't submit an SEP
U.S. holiday pause, softer Fed expectations and Asia rebound shape global markets: Dow Jones, S&P, Nasdaq, Wall Street Futures
U.S. index futures moved higher after June's employment report suggested a slower pace of hiring, easing fears that the Federal Reserve would tighten monetary policy again in the coming weeks. Analysts at Deutsche Bank noted that market expectations for a July rate hike had fallen from 34% on Tuesday to just 18% by Thursday's close. "Moreover, just 30 [basis points] of hikes are now priced in by the December meeting, the fewest since the Fed meeting a couple of weeks ago when the dot plot surprised in a hawkish direction," they added.
Goldman Sachs sends strong wake-up call on American jobs
June payrolls came in at just 57,000, less than half of what economists expected. Goldman Sachs now says AI could displace roughly 15 million American workers over the next decade, or about 9% of the U.S. workforce. "9% of workers being displaced by AI would correspond to 15 million workers leaving or being displaced from their positions today and having to find new jobs," he said. The New York Fed put the jobless rate for college graduates aged 22 to 27 at 5.6%. It is not that employers are running layoffs. They simply stopped backfilling. A June 2026 GMAC survey found that one in three employers has replaced entry-level roles with AI rather than hiring, Fortune reported. The unemployment rate dipped to 4.2% in June, but that was mostly because 507,000 people stopped looking for work entirely, CNBC noted. Goldman is forecasting that AI will deliver a 15% productivity boost at full adoption. That is where the 15 million figure comes from. Briggs is not saying this happens overnight. Spread over 10 years, he expects the unemployment rate rise to stay under one percentage point in any given year. The economy already generates about 30 million jobs a year while destroying 29 million.
Nvidia Believes Artificial Intelligence (AI) Capex Will Reach $3 Trillion to $4 Trillion by 2030. Here's Where Its Stock Price Could Go If It's Right.
Nvidia (NASDAQ: NVDA) is the world's largest company by market cap, and many investors are a bit worried that its stock may have reached a point where it can't grow fast for much longer. I think that's just not true, and expect that several tailwinds will push the stock to new heights over the next few years. The biggest of those tailwinds is the tech sector's soaring spending on the data center build-out. If this trend keeps up as Nvidia projects, then it should be a great stock to own in the coming years. Nvidia isn't alone in its projections On multiple occasions, Nvidia has made the bold assertion that global data center capital expenditures will reach $3 trillion to $4 trillion annually by 2030. For reference, the big four AI hyperscalers plan to spend around $650 billion on capex this year. That total doesn't include companies like OpenAI, Anthropic, xAI, or anything in China. So, the figure for the data center sector as a whole is likely several hundred billion dollars more. Next year, Nvidia expects the hyperscalers to spend around $1 trillion. Additionally, suppliers like Taiwan Semiconductor Manufacturing have already told investors to expect major growth for several more years, which is why they are spending big on increasing their production capabilities this year. One of the AI hyperscalers, Alphabet, told investors during its Q1 conference call that they should expect "significantly" higher capital expenditures in 2027 than the $180 billion to $190 billion it plans to spend in 2026. There simply isn't enough AI computing power to meet demand, and with everyone in the AI industry convinced that more computing power will solve problems, spending will trend that way, benefiting Nvidia.
Meta’s Bold $6.5 Billion Power Move to Turbocharge Its Cloud and AI Takeover
Meta Platforms (NASDAQ:META) appears ready to take another major step in that direction with a reported $6.5 billion agreement that could strengthen its long-term AI ambitions while reshaping the semiconductor landscape. Unlike the first two MTIA generations, which were built by Taiwan Semiconductor Manufacturing (NYSE:TSM), the new chips would be produced using Samsung’s cutting-edge 2-nanometer SF2 manufacturing process featuring Gate-All-Around (GAA) transistor technology. The contract reportedly covers hundreds of thousands of semiconductor wafers, making it one of Samsung Foundry’s largest AI orders after its reported $16.5 billion Tesla (NASDAQ:TSLA) agreement. Meta has made no secret of its AI ambitions. CEO Mark Zuckerberg has said the company plans to invest hundreds of billions of dollars in AI infrastructure while targeting as much as 5 gigawatts of computing capacity by 2030. That scale demands more than buying Nvidia hardware — it requires custom silicon optimized for Meta’s own Llama models and recommendation engines. Custom chips also improve economics. NVIDIA’s GPUs remain the gold standard for AI training, but they command premium pricing and face periodic supply constraints. Using Samsung reduces concentration risk while providing leverage during future pricing negotiations. It also helps hedge against geopolitical uncertainty surrounding Taiwan. Meta isn’t acting alone. Alphabet (NASDAQ:GOOG), Amazon, Microsoft (NASDAQ:MSFT), and Tesla have all invested heavily in custom AI silicon.
1 Unstoppable Stock to Buy Before It Joins Google, Apple, Microsoft, and Nvidia in the $3 Trillion Club
In 2026's first quarter, TSMC reported revenue of $35.9 billion, up 40.6% from the same quarter a year earlier. Net income rose 58.3% year over year. Gross margin came in at 66.2%. Net profit margin was 50.5%. Take a second with that last number. For every dollar TSMC brings in, it keeps fifty cents as profit. That's a level of operational leverage most companies would consider impossible. For Q2 2026, management guided for revenue between $39 billion and $40.2 billion. The full-year 2026 growth forecast is above 30% in U.S. dollar terms. At that trajectory, TSMC will generate well north of $150 billion in annual revenue this year. If margins hold even close to where they are, the profit picture is extraordinary. TSMC has roughly 70% global market share in advanced chip manufacturing, and no competitor is close to challenging that at the most cutting-edge nodes. Advanced technologies at 7 nanometers (nms) and below now account for 74% of TSMC's wafer revenue. That mix has shifted fast, and it matters because leading-edge nodes carry higher prices and better margins. As AI drives demand for 3nm and eventually 2nm chips, TSMC gets paid more per wafer and keeps more of it. TSMC has committed $165 billion to its Arizona expansion, a campus covering more than 2,000 acres with six planned fabs, two advanced packaging facilities, and an R&D center. The first Arizona fab already turned a $514 million profit in its first year of production.
Nvidia's next-gen AI rack system delayed to 2028 on manufacturing snags, SemiAnalysis says
Kyber NVL144 rack architecture has been delayed to 2028 as the PCB midplane remains challenging from a manufacturability standpoint. NVL576 — a larger system linking eight racks via optical connections — is also likely delayed or limited to small volumes, the research firm said. SemiAnalysis also projects Nvidia's data-center compute revenue will run 20% above Wall Street consensus in the second half of fiscal 2027.
Wall Street's $200 billion IPO wave threatens sell-off
Seventy-nine U.S. initial public offerings have raised $112.5 billion so far in 2026, up 625% from a year ago, Renaissance Capital data show. JPMorgan Chase projects total equity issuance will surpass $260 billion this year, The Motley Fool noted, a threshold the market has not crossed since 2021. SpaceX's record Nasdaq debut revealed both demand and fragility SpaceX raised $75 billion in its Nasdaq debut on June 12, pricing shares at $135 each and valuing the company at nearly $1.77 trillion. Total proceeds later climbed to $85.7 billion after underwriters exercised their option to buy additional shares, making it the largest offering ever recorded, CNBC reported. Renaissance Capital data shows that SpaceX alone accounted for approximately two-thirds of all U.S. initial public offering proceeds raised this year. Anthropic confidentially filed its S-1 registration statement with the Securities and Exchange Commission on June 1, after a $65 billion funding round. That funding round valued the artificial intelligence company at $965 billion, which represents its highest private valuation to date, Fortune reported. OpenAI submitted its own confidential filing on June 8, though a listing may not arrive until 2027 at the earliest. Chief executive Sam Altman is holding firm on a $1 trillion valuation target, above OpenAI's $852 billion private mark, The New York Times reported. Applying the five-times multiplier to a $200 billion initial public offering wave implies roughly $1 trillion in aggregate market value at risk. Corporate share buybacks are on pace to reach approximately $1.5 trillion this year, well above the $260 billion in projected new equity issuance. U.S. merger and acquisition deal value reached $1.2 trillion in the first five months of 2026, nearly double the $603 billion recorded in the same period a year ago, according to PwC, with cash-financed transactions adding to corporate equity demand alongside buybacks.
SpaceX, Alphabet, and SK Hynix Are Sending a Big Signal to the Market, and No One Is Talking About It
Combined, the three companies will raise about $200 billion. $200 billion in cash doesn't just appear out of nowhere. Investors have to sell other assets to put up that money. Most likely, they're selling other securities, which will put pressure on the rest of the stock market. With more giant IPOs coming down the pipeline and more SpaceX shares entering the market post-lockup, there's still a huge amount of money that will shift in the market. The fact that these companies are tapping their equity for cash suggests they see the stock market as willing to pay premium prices for equity right now. That's certainly true, as the equity risk premium (the difference between the earnings yield and the yield on Treasury bonds) has shrunk to nearly nothing.