Strong Jobs Report Dampens Fed Rate Cut Hopes, Capping Gold Gains

Market Overview

Last Friday, the U.S. nonfarm payrolls report came in well above expectations, easing recession fears and—along with positive trade news—pushing the S&P 500 past the 6,000 mark for the first time. The “Magnificent Seven” tech giants all posted gains, lifting the broader U.S. equity market. However, the robust employment data cooled expectations for Fed rate cuts this year. U.S. Treasury yields surged, with the 2-year yield climbing above 4%, and the dollar strengthened in tandem.

In commodities, spot gold dropped over 1%, while silver extended its rally—up more than 1.4% intraday before pulling back slightly. Crude oil prices rose nearly 2% on bullish sentiment. Overall, market sentiment shifted from pessimism to optimism, with risk assets broadly advancing.

Hot Topics to Watch

● U.S. Labor Force Shrinking Despite Job Gains

May saw 139,000 new nonfarm payroll jobs added—above market expectations. However, downward revisions to previous data (including a 95,000-job cut across March and the prior month) offset the headline strength. Although wages grew more than anticipated, the overall labor force is contracting. As noted by the so-called “Feds unofficial mouthpiece,” the bigger picture suggests the U.S. unemployment rate is on the rise.

● Japans Q1 Real Estate Investment Hits Record High

Global real estate investment rose 34% YoY in Q1 2025, with over ¥2 trillion (approx. $14.3 billion USD) flowing into Japan‘s property sector—a 23% increase from a year earlier. Tokyo led all global cities with $11 billion in real estate investments, well ahead of New York’s $7.3 billion. This signals Japans persistent inflationary environment and strong investor interest.

Key Events to Watch

• 22:00 GMT+8 – U.S. April Wholesale Sales MoM

• 23:00 GMT+8 – U.S. May NY Fed 1-Year Inflation Expectations