ETO Markets Buzz | Strong US Jobs Delay Rate Cut Hopes as Tech Stocks Slide

Global Market Overview | June 2026

According to ETO Markets analysis, global markets are repricing the balance between resilient US employment, softer wage pressure, weaker technology sentiment, and fading commodity demand. US equities sold off sharply after stronger-than-expected payrolls reduced expectations for near-term Federal Reserve rate cuts. The Nasdaq fell 4.2%, the S&P 500 lost 2.6%, and the Dow declined 1.4%, with pressure concentrated in semiconductor and AI-linked shares.

US payrolls increased by 172,000 in May, well above expectations of 85,000, while the unemployment rate held steady at 4.3%. Wage growth moderated to 3.4%, offering some relief on labour-driven inflation, but the strong jobs print still reinforced the view that borrowing costs may stay elevated for longer.

Labour Market Stays Resilient

The May employment report showed continued strength across the US labour market. Job gains were led by leisure and hospitality, which added 70,000 roles, while local government added 55,000 and health care gained 35,000.

Revisions also strengthened the picture. March and April payrolls were revised higher by a combined 93,000, suggesting the labour market had been stronger than previously reported. This makes it harder for markets to dismiss the latest report as a one-month outlier.

Wage Growth Eases Pressure

Wage growth remains central to the Federal Reserves inflation assessment. Wages rose 3.53% year on year, below the long-run average of 6.14% between 1960 and 2026. This suggests pay pressure remains positive but is not accelerating aggressively.

The key policy nuance is that strong hiring is hawkish, but softer wage growth reduces the risk of a more aggressive Fed response. Employment strength may delay rate cuts, while wage moderation gives policymakers some confidence that labour-driven inflation is not worsening.

Equities Face Rate Sensitivity

For equity markets, this mix is difficult. Strong employment supports growth and corporate revenues, but it also keeps pressure on interest rate expectations. Higher discount rates tend to weigh on growth and technology shares, where valuations depend heavily on future earnings.

This was reflected in the sharp decline across AI and semiconductor-linked names. Markets remain highly sensitive to each labour market release, especially wage data, as investors assess whether the Fed can eventually cut rates without reigniting inflation.

Commodities and Australia Weaken

Commodity markets also softened. WTI crude fell around 3% as traders focused on weaker global demand, while reports showed Chinese oil imports falling to their lowest level in 10 years. Gold declined toward USD 4,370 as higher-rate expectations reduced the appeal of non-yielding assets.

Australia also showed weaker momentum. GDP growth slowed to 0.3% quarter on quarter from 0.9%, while annual growth of 2.5% came in below consensus. The data suggest domestic demand is losing momentum, complicating the RBAs task as it balances slower growth against lingering inflation risks.

Outlook

Looking ahead, ETO Markets expects Iran-US developments, US inflation data, central bank decisions, and global activity indicators to remain key market drivers. The US will release CPI, PPI, existing home sales and trade data ahead of the Federal Reserve decision, while China will publish trade and inflation figures.

The European Central Bank and Bank of Canada will announce policy decisions, while the UK reports GDP, trade and industrial production. Markets will also watch Australia‘s leading indicators, CPI data from Brazil, Mexico and Russia, SpaceX’s expected record IPO, and OPEC+ output quota decisions.

In this environment, ETO Markets continues to emphasise close monitoring of labour data, wage growth, inflation signals, commodity demand and policy expectations. Strong employment keeps the US economy resilient, but it also delays rate-cut expectations and leaves equities vulnerable to renewed valuation pressure.

Disclaimer

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