Report by Renta 4
European markets opened flat, but US futures were down (S&P 0.5%, Nasdaq 1%) and declines in Asia, with Japan’s Nikkei down 1% and South Korea’s Kospi down 5% (although it had fallen as much as 7% during the session, weighed down by Samsung and SK Hynix, which account for 54% of the index) amid profit-taking in the AI ‘trade’. Added to this is the news that S&P has reportedly rejected SpaceX’s fast-track entry into the index (contrary to the decisions by Nasdaq – 15 days – and Russell – 5 days –), meaning it will have to wait 12 months for inclusion in the index, whilst also meeting the profitability requirement (currently in deficit due to the integration of xAI) and the minimum free float requirement.
Today’s session will be dominated by the official US jobs report, where a resilient labour market is expected, as already signalled by the JOLTS vacancies and the ADP private employment survey. The consensus forecast is for non-farm payrolls of 85,000 (compared to 115,000 previously, which was a positive surprise, and an average of 57,000 so far this year), which would keep the unemployment rate at 4.3% for the third consecutive month, whilst wage growth is expected to moderate (3.4% against 3.6% previously). The data will be significant for the Fed, with the market pricing in a 25 bp hike between late 2026 and early 2027; should a resilient labour market be confirmed, the Fed could focus more heavily on the price stability target (2%, with May’s CPI due next week potentially rising to 4.2%e).
On the geopolitical front, Brent crude has halted Thursday’s decline and stabilised around $95–96 per barrel amid a situation that continues to deteriorate in the Middle East, following Hezbollah’s rejection yesterday of the ceasefire agreed by Israel and Lebanon (with hostilities between Israel and Hezbollah continuing), which once again calls into question the US-Iran agreement. Added to this are statements from Iran, via its Foreign Minister Araghchi, suggesting that no tangible progress has been made in the negotiation process with the US, directly contradicting Trump (who claims the talks are in their final stages).
Furthermore, although Iran has allowed a UN nuclear inspection this week, it has blocked verification of the location and status of its enriched uranium stockpile, a sign that nuclear concessions remain its most rigid red line. On the positive side, the UK and France have finalised plans to lead a multinational mine-clearing mission in the Strait of Hormuz as soon as an agreement is reached.
