Closing Recap
U.S. stocks treaded water on Thursday ahead of the June nonfarm payrolls report, with the S&P 500 holding near 7,476.59, the Dow Jones at 52,275.27, and the Nasdaq 100 at 29,650 as a brutal semiconductor selloff on Wednesday continued to reverberate through the tech complex. The Russell 2000 dipped to 3,012.59. It is only Thursday, but we are effectively at the end of the week – a holiday-shortened one with both the stock and bond markets closed Friday for Independence Day. The headline nonfarm payrolls figure is expected at 110K in June, down sharply from 172K in May, while the unemployment rate is seen holding steady at 4.3%. Traders are not really anticipating the Fed to move on policy ahead of the summer, but the odds of a 25bps rate hike do increase materially to ~66% for September.
Gold managed a relief rally, climbing 0.86% to $4,066.12 after Fed Chair Kevin Warsh said inflation expectations had eased over the past month, signaling there was no urgency to raise interest rates – even as he reaffirmed the central bank’s commitment to restoring price stability. WTI crude continued its slide to $67.76 as rising oil shipments through the Strait of Hormuz and progress in US-Iran indirect talks eased supply fears. The dollar index pulled back marginally to 101.28, but USD/JPY surged to 162.20 – a whisker from all-time extremes – as Japan shifted to ambush-style intervention tactics against speculators. Bitcoin hovered near $59,000, under relentless pressure from the rate outlook and Strategy’s bombshell announcement that it may sell up to $1.25 billion of its Bitcoin to fund dividends.
Key Takeaways
- Stocks Mixed on Holiday-Eve Trading: The Dow slipped 0.03% to 52,305.24, the S&P 500 fell 0.22% to 7,483.23, and the Nasdaq dropped 0.66% to 26,040.03. Both U.S. stock and bond markets will be closed Friday for Independence Day.
- Semiconductor Bloodbath: Micron Technology plunged 10.5%, SanDisk tumbled 10.6%, and AMD sank 6.8% as investors locked in profits after the Philadelphia Semiconductor Index more than doubled in the first half. Meta Platforms bucked the trend, surging 8.8%.
- Jobs Report Day – But on a Thursday: The June nonfarm payrolls report is the main event, released today (Thursday) instead of Friday due to the Independence Day holiday. Consensus expects +110K jobs, down from +172K in May. The unemployment rate is seen steady at 4.3%. A strong print cements the ~66% September hike probability; a weak print could dial it back.
- Oil Plunges to Four-Month Lows: WTI crude fell 1.2% to $67.75 per barrel, while Brent crude dropped 1.1% to $70.80, marking a third straight session of declines. U.S. officials confirmed oil flows through the Strait of Hormuz had climbed to more than 10 million barrels per day.
- Gold Steadies Above $4,000: COMEX gold traded at $4,065.30 per ounce, down 0.42%, after Fed Chair Warsh said “inflation risks have declined”. Spot gold rose 0.59% to $4,031.29.
- Silver Bounces: Spot silver rose 0.92% to $59.11 per ounce, with prices briefly surpassing $60 before paring gains.
- Dollar Holds Near 13-Month High: The DXY rose 0.20% to 101.39, with the euro slipping to $1.1377.
- Yen Hits Fresh 40-Year Low: USD/JPY sank to 162.84, a new 40-year low, as Japan’s policy rate gap with the Fed continued to underpin the structural case for yen weakness.
- BofA Turns Neutral on JPY: BofA Global Research revised its JPY medium-term view from bearish to neutral for the first time since 2021, targeting USD/JPY at 156 in Q3 and 152 by year-end. “We are sufficiently close to pain thresholds in USD/JPY and JGB yields for Japan policymakers to pivot toward a more prudent fiscal/monetary stance.”
- Bitcoin Reclaims $60,000: BTC rose 2.37% to trade near $60,350, recovering the key psychological level as falling oil prices and a softer dollar improved risk sentiment.
- Strategy May Sell $1.25B of Bitcoin for Dividends: Strategy (formerly MicroStrategy) announced it may sell up to $1.25 billion of its Bitcoin holdings to fund shareholder dividends – a stunning reversal of Michael Saylor’s accumulation-at-any-price philosophy that has sent shockwaves through the crypto market.
- BofA Warns of Bubble-Like Conditions: BofA’s Bubble Risk Indicator surged to 0.91 for U.S. semiconductors and 0.82 for the technology sector – the highest since the indicator was introduced in 2023. The Nasdaq 100 reading hit a record 0.75.
- Hedge Fund Equity Exposure at Record Low: Hedge fund exposure to U.S. equities fell to -20% relative to the MSCI ACWI Index – a record low, down from 0% at end-2023.
- Gold Forms Death Cross: The gold spot price formed a “Death Cross” for the first time since October 2023, a bearish technical signal where the 50-day moving average crosses below the 200-day.
- Japan Shifts to Ambush Intervention Tactics: Tokyo is abandoning signaled interventions in favor of unsignalled “ambush” tactics against yen speculators, sources told Reuters, raising the cost of holding short yen positions.
- June Jobs Report Looms: The June nonfarm payrolls report will be released Thursday – a day early due to the holiday – with expectations of 110,000 jobs added, down from 172,000 in May. The unemployment rate is expected to hold at 4.3%.
Market Overview
Wednesday”s session was a textbook pre-NFP holding pattern, with markets frozen in anticipation of the June jobs report that will set the tone for Fed policy expectations through the summer. It is only Thursday, but we are effectively at the end of the week – the Independence Day holiday has compressed the entire trading week, and with markets closed Friday, today’s price action is all that matters for positioning into the long weekend.
The semiconductor wreck from Wednesday continued to cast a long shadow, with chipmakers and memory stocks nursing severe losses after a wave of profit-taking swept through the AI complex.The selling spilled into Asia, with Japan’s Nikkei 225 falling as much as 2.5% before paring losses to close down 0.99% at 69,779, while South Korea’s Kospi cratered 6.67%.
U.S. and Major World Indices:
| Index | Up/Down | % | Last | Sentiment |
| Dow Jones Industrial Average | Down | -0.03% | 52,305.24 | Neutral |
| S&P 500 | Down | -0.22% | 7,483.23 | Bearish |
| Nasdaq Composite | Down | -0.66% | 26,040.03 | Bearish |
| FTSE 100 | Down | -0.18% | 10,478.34 | Bearish |
| DAX 30 | Up | +0.18% | 25,040.28 | Bullish |
| CAC 40 | Down | -0.79% | 8,337.29 | Bearish |
| Nikkei 225 | Down | -0.99% | 69,779.01 | Bearish |
| Hang Seng | Up | +1.19% | 23,154 | Bullish |
| KOSPI | Down | -6.67% | — | Bearish |
The commodity complex told a very different story. Oil extended its post-war slump to a third straight session, with WTI falling below $68 per barrel for the first time in four months as U.S.-Iran talks in Doha concluded with progress on restoring Hormuz flows. A U.S. official confirmed that oil shipments through the Strait of Hormuz had climbed to more than 10 million barrels per day. Meanwhile, gold steadied above $4,000 after Fed Chair Warsh’s Sintra remarks that “inflation risks have declined” provided some relief to the battered precious metal. The 10-year Treasury yield rose 5.5 basis points to 4.475% as markets braced for Thursday’s jobs data.
Economic Calendar
The macro data landscape was dominated by the June nonfarm payrolls report, arriving a day early due to the Independence Day holiday. Markets are bracing for a potential 110,000 print that could seal the case for a September Fed rate hike.
Data Released Yesterday / Overnight:
- U.S. ADP Non-Farm Employment (June): Came in below expectations, providing a modest counterweight to hawkish Fed expectations.
- U.S. S&P Global Manufacturing PMI (Final June): Manufacturing data released ahead of the ISM print.
- U.S. ISM Manufacturing PMI (June): Key manufacturing indicator watched for signs of economic resilience.
- Fed Chair Warsh at ECB Forum: Stated that “inflation risks have declined,” providing some relief to bond markets.
- U.S.-Iran Doha Talks Conclude: Progress made on restoring Hormuz oil flows, with U.S. officials confirming shipments above 10 million barrels per day.
- Japan Intervention Shift: Reuters reported Japan is shifting to unsignalled “ambush” intervention tactics against yen speculators.
Today’s Economic Calendar:
- U.S. Nonfarm Payrolls (June): The week’s marquee event – expected at 110,000 jobs added, down from 172,000 in May. Unemployment rate expected to hold at 4.3%.
- U.S. Average Hourly Earnings (June): Key wage inflation indicator.
- U.S. Trade Balance (May): Trade data.
- U.S. Bond Market Early Close: Will close early today ahead of the Independence Day holiday.
- U.S. Stock Market: Will run as usual today but closed Friday.
Major Risk Events This Week:
- U.S. Nonfarm Payrolls (Thursday): The June report arrives a day early. A strong print could cement expectations for a September Fed hike (currently priced at ~66%), while a weak reading could ease pressure on gold and Bitcoin.
- Independence Day Holiday (Friday): U.S. markets closed.
- U.S.-Iran Technical Consultations: Further discussions expected following the Doha talks.
Asset Class Spotlight: FX, Commodities, Bonds & Crypto
Precious metals managed a tentative relief bounce on Wednesday as Warsh’s comments about eased inflation expectations provided a rare window of hope for beaten-down gold and silver bulls. Gold climbed 0.86% to $4,066.12, reclaiming the $4,000 psychological level after briefly falling below it earlier in the week. But the bounce is fragile at best — the GLD Death Cross, formed for the first time since October 2023, is a powerful bearish technical signal that suggests the medium-term trend remains firmly lower. Deutsche Bank’s warning that gold could collapse to $3,800 if the Fed delivers multiple hikes continues to hang over the market.
Credit Agricole maintains a contrarian $5,240 target, arguing that “many negatives are already in the price” and central bank selling should slow as energy prices normalize, but for now, the institutional exodus continues. Silver’s 1.32% bounce to $59.87 was equally tentative – the white metal remains in a catastrophic downtrend, down over 50% from its January all-time high of $121.64. Oil plunged for a third straight session to four-month lows, with WTI falling 1.2% to $67.75 per barrel and Brent dropping 1.1% to $70.80. Citi’s bearish $60-65 target by Q1 2027 is looking increasingly prescient as the debasement trade continues to unravel.
Asset Class Snapshot:
| Asset | Up/Down | Unit / % Change | Last |
| WTI Oil | Down | -1.2% | $67.75/bbl |
| Brent Oil | Down | -1.1% | $70.80/bbl |
| Gold (COMEX) | Down | -0.42% | $4,065.30/oz |
| Gold (Spot) | Up | +0.59% | $4,031.29/oz |
| Silver (Spot) | Up | +0.92% | $59.11/oz |
| Bitcoin | Up | +2.37% | ~$60,350 |
| EUR/USD | Down | -0.4% | 1.1377 |
| GBP/USD | Up | +0.06% | 1.3279 |
| USD/JPY | Up | — | 162.84 |
| 10-Year Note Yield | Up | +5.5 bps | 4.475% |
The FX market was dominated by the yen’s continued collapse and Japan’s dramatic shift in intervention strategy.
- USD/JPY: The yen sank to 162.84 per dollar – a fresh 40-year low – as the interest rate differential with the U.S. continued to pressure the currency. Japan is shifting to unsignalled “ambush” intervention tactics against speculators, sources told Reuters, raising the cost of holding short yen positions. A wide policy rate gap between the BOJ’s 1% and the Fed’s 3.50-3.75% continues to underpin the structural case for yen weakness.
- EUR/USD: The euro slipped 0.4% to $1.1377 as the dollar held near 13-month highs. Markets are pricing a binary outcome for the dollar depending on Thursday’s jobs data.
- GBP/USD: Sterling edged 0.06% higher to $1.3279, showing relative resilience amid the broader dollar strength.
- AUD/USD: The Aussie collapsed to 0.6895, weighed down by commodity price weakness and China growth concerns. The 0.70 psychological level has been decisively breached.
Cryptocurrencies & Treasuries:
Bitcoin reclaimed the $60,000 level, rising 2.37% to trade near $60,350 as falling oil prices and a softer dollar improved risk sentiment. However, the Crypto Fear & Greed Index remained in “Extreme Fear” territory, with Bitcoin ETFs recording an eighth consecutive day of outflows – another $231 million exited on Tuesday, bringing June’s total to $4.3 billion. In Treasuries, the 10-year yield rose 5.5 basis points to 4.475%, while the 2-year yield traded at 4.181%, as markets braced for Thursday’s jobs data. Fed Chair Warsh’s remark that “inflation risks have declined” provided some relief to bonds, though the curve steepened with the 10s-2s spread widening to 30.9 basis points.
Looking Ahead
All eyes are on Thursday’s June nonfarm payrolls report – arriving a day early due to the Independence Day holiday – with markets bracing for a potential 110,000 print that could seal the case for a September Fed rate hike. The unemployment rate is expected to hold steady at 4.3%, while average hourly earnings will be scrutinized for wage inflation signals. As things stand, traders are pricing a ~66% probability of a 25-basis-point rate hike in September, with approximately 36 basis points of tightening priced in by year-end.
The dollar’s fate hangs in the balance – a strong jobs print could send the DXY surging toward 102 and USD/JPY toward 163, while a weak reading could trigger a sharp reversal that offers relief to gold, silver, and Bitcoin. Meanwhile, Japan’s shift to unsignalled intervention tactics adds a wildcard to the yen outlook, with Tokyo ready to ambush speculators at any moment.
What to Watch Today
- The Jobs Report Landmine: The June nonfarm payrolls report arrives Thursday – a day early due to the holiday. Expected at 110,000 (down from 172,000 in May). A strong print could cement a September Fed hike (currently ~66% priced), while a weak reading could trigger a sharp reversal in the dollar.
- Japan’s Intervention Ambush: Tokyo has shifted to unsignalled “ambush” tactics against yen speculators, sources told Reuters. With USD/JPY at 162.84 — a fresh 40-year low – the risk of sudden intervention has never been higher.
- Gold’s Death Cross: Gold formed a “Death Cross” for the first time since October 2023 – a bearish technical signal. However, Warsh’s remark that “inflation risks have declined” provided some relief, with spot gold rising 0.59% to $4,031.
- Oil’s Pre-War Test: WTI at $67.75 is now below its pre-war price of approximately $67-68, signaling that the geopolitical premium has fully evaporated. Further declines could pressure energy stocks and ease inflation fears.
- Bitcoin’s $60,000 Test: BTC reclaimed $60,000 but faces headwinds from eight consecutive days of ETF outflows ($4.3 billion in June) and Strategy’s potential $1.25 billion in Bitcoin sales. The $58,000 support level remains critical.