See the ‘Market Data’ post.
Good evening,
US stock indices rose today, primarily driven by a better-than-expected non-farm payrolls report that eased investor concerns about the economy's strength. The economy added 139k jobs (vs +130k exp) in May, surpassing expectations but falling in the past two months. It signals resilience in the labour market although the April figure was revised down by 30k to 147k. The unemployment rate remained steady at 4.2% as anticipated while average hourly earnings came in stronger than forecasts, up 3.9% YoY.
This positive data helped alleviate fears of an imminent economic slowdown after this week’s disappointing data including PMIs and the ADP jobs report. Leading US equity indices added more than 1% today to their highest level in over 3 months and the S&P 500 closed above 6,000 points. The VIX volatility index fell to 16.8%, the lowest since mid-February.
The good NFP update reduced the probability of an imminent rate cut by the Fed, a negative catalyst for bond prices and Treasury yields spiked between 8 and 13bp across tenors with the whole curve now yielding over 4% and the 30-yr approaching 5% once again. This led to a $ appreciation against all major currencies but particularly versus the yen. Gold fell 1% and crude oil advanced 2% on the back of the employment report, to accumulate a 4% rally this week.
Tesla’s stock advanced 3.7% after plunging 14% yesterday due to the dispute between Musk and Trump that included Musk’s call for impeachment. Tesla is up 7% in the past four weeks despite this recent sell-off.
In geopolitics, Russia launched a massive overnight air assault on Ukraine, deploying over 400 drones and 45 missiles across multiple regions, including Kyiv. This attack, resulting in at least three deaths and dozens of injuries, was a direct retaliation for Ukraine's recent drone strikes that damaged Russian strategic bombers deep within Russian territory.
There were no significant M&A deals or earnings announcements today, but one IPO to highlight. Omada Health (OMDA) a San Francisco-based co that provides virtual care programs for chronic conditions such as diabetes and hypertension, raised $150mn and was priced at $19. Shares jumped 21% on its debut on Nasdaq for a market value of $1.3bn.
That’s all for this week, enjoy your weekend.
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