Investor confidence strengthened on Friday as a better-than-expected US jobs report helped ease concerns over a potential economic slowdown. Equities surged, with the S&P 500 reclaiming the 6,000 mark and the Dow climbing more than 400 points. Hopes for progress on trade also lifted sentiment after President Trump announced new talks with Chinese officials. Meanwhile, Treasury yields spiked as markets recalibrated expectations for future Federal Reserve moves. The week ended on an upbeat note, but attention now turns to upcoming macro data and the evolving tariff landscape.

Key Takeaways:

  • Dow Rallies More Than 400 Points on Strong Jobs Report: The Dow Jones Industrial Average surged 443.13 points, or 1.05%, to close at 42,762.87 on Friday. The index was up over 500 points at session highs as investors welcomed solid labour market data. 
  • S&P 500 Breaks Through 6,000 as Optimism Builds: The S&P 500 jumped 1.03% to finish at 6,000.36, surpassing the 6,000 level for the first time since late February. The index posted a 1.5% weekly gain and remains more than 2% below its February high.
  • Nasdaq Advances Over 1% led by Tech Rebound: The Nasdaq Composite climbed 1.20% to close at 19,529.95, supported by gains in key tech stocks. Tesla rebounded more than 3% after sharp losses on Thursday, while Nvidia, Meta Platforms and Apple also contributed to the rally. For the week, the Nasdaq jumped 2.2% as tech sentiment improved.
  • European Markets Gain on Strong GDP Revision and ECB Cut, but German Data Disappoints: European equities closed higher after absorbing this week’s ECB rate cut and a robust revision to eurozone GDP. The Stoxx Europe 600 rose 0.32%, while the FTSE 100 advanced 0.75% to 8,837.91. France’s CAC 40 edged up 0.13% and Italy’s FTSE MIB gained 0.55%. In contrast, Germany’s DAX slipped 0.08% to 24,304.46 as April industrial production fell 1.4% and the trade surplus narrowed to €14.6 billion. Eurozone Q1 GDP was revised up to 0.6% quarter-on-quarter and 1.5% year-on-year. Employment grew 0.2% on the quarter, slightly below flash estimates. In France, the trade deficit widened to €7.97 billion. UBS surged 5.4% after Switzerland proposed $26 billion in additional capital requirements post-Credit Suisse acquisition. 
  • Asia Markets Mixed as Traders Eye Trump-Xi Talks and Regional Data: Asia-Pacific markets closed mixed as investors weighed a constructive Trump-Xi call and varied economic signals. Japan’s Nikkei 225 rose 0.5% to 37,741.61, supported by a 4.1% rise in core CPI despite stagnant wage growth. The Topix gained 0.47% to 2,769.33. In China, Hong Kong’s Hang Seng fell 0.5% to 23,792.54, while the China Enterprises Index dropped 0.6% to 8,629.75. The mainland CSI 300 ended flat at 3,873.98. India’s Nifty 50 outperformed, climbing 0.96% after the RBI surprised markets with a hefty 50 bp rate cut to 5.5% — the third cut since February. Australia’s ASX 200 slipped 0.27% to 8,515.7 as trade uncertainty lingered. South Korea remained closed for a public holiday. Markets will watch next week’s US-China trade talks in London for further direction.
  • Oil Rallies as Growth Optimism Lifts Demand Outlook: Oil prices posted solid gains on Friday, lifted by strong US jobs data and optimism around resumed US-China trade discussions. Brent crude rose $1.28, or 1.96%, to $66.62, while WTI climbed $1.34, or 2.11%, to $64.71. Both benchmarks snapped a two-week losing streak, with Brent up 2.75% and WTI advancing 4.9% for the week. Meanwhile, Saudi Arabia trimmed July prices for Asia less than expected as OPEC+ gears up to boost output.
  • Treasury Yields Climb Following Robust Labour Report: Treasury yields spiked after the May payrolls report exceeded expectations. The 10-year yield rose more than 11 basis points to 4.506%, while the 2-year yield advanced over 11 basis points to 4.041%. The 30-year yield added more than 8 basis points to 4.966%. 
  • US Nonfarm Payrolls Beat Expectations, Unemployment Steady: US payrolls rose by 139,000 in May, topping the 125,000 consensus estimate, though slightly below April’s revised 147,000. The unemployment rate held at 4.2%. The solid reading followed softer signals earlier in the week, including higher jobless claims and a weak ADP private payrolls report. Markets now await further clarity on inflation impacts from tariffs, with new trade talks scheduled next week in London.

FX Today:

  • EUR/USD Slips but Holds Uptrend After Hitting 2022 Highs: EUR/USD retreated on Friday, closing at 1.1396, down 0.42% on the session. The pair had earlier touched an intraday high of 1.1457 but struggled to maintain momentum above 1.1400 into the close. Despite the pullback, EUR/USD remains firmly in an uptrend, having broken key resistance levels in May to reach its highest point since early 2022. The bullish structure is reinforced by rising moving averages, with the 50-day SMA at 1.1256, the 100-day at 1.0917, and the 200-day at 1.0820. Should EUR/USD stabilise above 1.1350, a retest of 1.1450 is likely, with potential to target new highs above 1.1500. On the downside, initial support lies at 1.1256, with a move below this level potentially opening the door to 1.1200. 
  • GBP/USD Consolidates after Impressive Rally, Eyes Further Gains: GBP/USD edged lower on Friday to settle at 1.3533, down 0.27% for the day. The pair reached an intraday high of 1.3584 but encountered resistance near this level, prompting a late-session pullback. Overall, GBP/USD remains close to its highest levels since early 2022, underpinned by a strong rally from March’s low of 1.2200. The trend remains positive, supported by bullish moving averages: 50-day at 1.3278, 100-day at 1.2973, and 200-day at 1.2910. A break above 1.3580–1.3600 would set the stage for a move towards 1.3700. Conversely, immediate support is seen near 1.3400, with stronger backing at the 50-day SMA. 
  • USD/JPY Rebounds Strongly, Retests 145.00 Resistance Zone: USD/JPY rallied sharply on Friday, closing at 144.79 with a 0.90% daily gain. The pair rebounded from a low of 143.44 and briefly tested resistance at 145.09 before consolidating near the 145.00 handle. This recovery comes after a difficult April-May period that saw the pair slip below 140.00. Moving averages remain downward-sloping, with the 50-day SMA at 144.52, the 100-day at 147.91, and the 200-day at 149.40, signalling that medium-term bearish momentum is still in play. A sustained break above 145.00 and the 50-day SMA would improve the technical outlook and open room for a test of 147.00. On the downside, initial support is at 143.00, with stronger demand expected at 142.00. 
  • USD/CAD Holds near Multi-Month Lows as Bearish Trend Persists: USD/CAD edged up slightly on Friday, closing at 1.3695, a gain of 0.16%. The pair recorded a high of 1.3704 but remains near its lowest levels in three months. USD/CAD has been steadily pressured lower since peaking above 1.4700 in March, with sellers firmly in control. The bearish outlook is underscored by moving averages that remain well above current price: 50-day SMA at 1.3903, 100-day at 1.4117, and 200-day at 1.4024. If USD/CAD fails to hold the 1.3650 area, further downside towards 1.3600 and potentially 1.3500 remains in play. Resistance is at 1.3800, with stronger hurdles near the 50-day SMA. 
  • Gold Retreats after Recent Highs, but Uptrend Remains Intact: Gold slipped on Friday, settling at $3,322, down 0.93% for the session. The metal reached a high of $3,376 before profit-taking emerged, pulling prices lower into the close. Despite this retreat, gold’s broader uptrend remains unbroken, supported by higher highs and higher lows since late 2024. Key moving averages remain bullish: 50-day SMA at $3,255, 100-day at $3,069, and 200-day at $2,850. For now, gold continues to hold comfortably above the $3,200 zone. If it can reclaim resistance in the $3,350–$3,375 area, a fresh attempt at the recent $3,500 peak may follow. On the downside, support is seen at $3,250, with the rising 50-day SMA providing an additional cushion. 

Market Movers:

  • Tesla Rallies After Musk Signals Truce with Trump: Shares of Tesla climbed more than 3% after CEO Elon Musk indicated he would de-escalate tensions with President Trump. The move followed Thursday’s sharp 14% drop after Musk called for Trump’s impeachment.
  • QXO Inc Surges on New Outperform Rating: Shares of QXO Inc jumped more than 13% after Wolfe Research initiated coverage on the stock with an outperform rating and a $44 price target, driving strong buying interest.
  • Quanex Building Products Jumps on Strong Sales Beat: Shares of Quanex Building Products rose over 10% after the company reported second-quarter net sales of $452.5 million, surpassing analyst expectations of $439.3 million.
  • Lululemon Athletica Sinks on EPS Guidance Cut: Shares of Lululemon Athletica fell more than 19% after the company cut its full-year EPS guidance to $14.58–$14.78.
  • Docusign Drops on Weak Billings and Outlook: Shares of Docusign slid more than 18% after reporting first-quarter billings of $739.6 million, missing expectations of $746.4 million, and cutting its full-year billings forecast.
  • Vera Therapeutics Plunges on Rival’s Positive Trial Results: Shares of Vera Therapeutics dropped more than 25% after Japanese rival Otsuka reported stronger trial results for its kidney disease therapy, overshadowing Vera’s own data.

Markets wrapped up the week with renewed optimism, fuelled by solid US payroll data and easing trade tensions between the US and China. The stronger labour report helped ease concerns of an imminent economic slowdown, while upcoming trade talks in London could provide further clarity on tariff impacts. Treasury yields rose as investors recalibrated expectations for the Federal Reserve’s next steps. European and Asian markets also reflected a positive tone, despite mixed regional data. Looking ahead, traders will be closely watching the next round of macroeconomic indicators and any fresh signals from policymakers as the summer unfolds.