To The Moon

Was it right to say that nobody saw the Friday crash coming ?

The debate is still out there.

One thing for certain, it was a bloodbath last Fri, 05 Jun 2026. (see below)

On Friday itself, the 3 major indexes all fell ‘big’ time: (see above)

• DJIA : -1.35% (-695.15 to 50,866.78).

• S&P 500: -2.64% (-200.57 to 7,383.78).

• Nasdaq: -4.18% (-1,121.526 to 25,709.432)

For the first week of June 2026, the 3 major indexes fared as such:

• DJIA: -0.58% (-294.32 to 50,866.78).

• S&P 500: -2.62% (-198.55 to 7,383.74).

• Nasdaq: -4.61% (-1,243.15 to 25,709.43)

The press has partially & indirectly attributed the US economic reports for the week on market’s fall.

Is this a fair statement, I wonder?

Last week’s US economic reports :

• 01 Jun 2026 - ISM Manufacturing PMI for May 2026.

• 02 Jun 2026 - Jobs opening and Labour turnover survey (JOLTs) for April 2026.

• 03 Jun 2026 - ADP Non-farm payroll for May 2026.

• 03 Jun 2026 - ISM Services for May 2026.

• 04 Jun 2026 - US Jobless claims.

• 05 Jun 2026 - US Non-farm payroll for May 2026.

ISM Manufacturing.

The May 2026 ISM Manufacturing PMI registered +54.0%, marginally higher than Wall Street estimates of 53.3% and a +1.3% higher than April 2026’s reading.

In fact, this is the highest reading since May 2022.

Report indicates that US manufacturing sector has expanded for the 5th consecutive month, signaling a clear re-acceleration in factory activity.

Key Report Highlights

• New Orders (56.8%): Posted a massive 2.7 point gain, indicating a strong influx of pent-up demand and business orders.

• Employment (48.6%): While it rebounded by +2.2 points, it remains below the 50% threshold, indicating moderating, labour market softness.

• Prices Paid (82.1%): Although it eased slightly from April 2026 (84.6%), raw material costs remain extremely elevated due to supply chain constraints and geopolitical tensions.

• Sector Growth: Of the 18 manufacturing industries, 16 reported growth in May 2026. Only Wood Products experienced a contraction.

Despite consecutive improvement, analysts remained cautious, still concern over (a) Supply chain continuity challenge, amidst (b) rising oil prices due to the 3-month old Middle East conflict, with a peace deal still seemingly elusive.

Jobs opening and Labour turnover surveys (JOLTs).

The April 2026 Job Openings & Labor Turnover Survey (JOLTS) revealed a massive, unexpected surge in US job openings to 7.618 million vs market consensus forecast of 6.86 million vs March 2026 upwards revised’s 6.887 million.

The +731,000 gain for May 2026’s reading is the highest level in nearly 2 years, well above consensus forecast.

Hiring in April 2026, however fell by -7.6% MoM (-419,000) to 5.116 million from a slightly downwardly revised March 2026’s 5.535 million.

Last but not least, layoff rate edged down lower to 1.1% from March 2026’s 1.2% and quit rate ticked down marginally to 1.9% in April 2026.

Overall, the “low fire, low hire” narrative is still playing out strongly.

ADP Non-Farm Payroll.

For May 2026, US private sector jobs report continue to climb higher, rounding up at 122,000 vs market estimates of 118,000 vs April 2026 downwards revised of 105,000.

Jobs growth.

Sectors that contributed to jobs growth can be found in:

• Education & Health Services (+57,000).

• Trade, Transportation & Utilities (+36,000).

• Construction (+8,000).

Conversely, the IT sector lost -9,000 jobs.

This does not come as a surprise given recent news of mass layoff in Q2 2026:

• 01 Apr 2026 - $Oracle(ORCL)$ reportedly laid off 10,000 of its 162,000 employees and a further 20,000 by 2026 year end.

• 19 May 2026 - $Meta Platforms, Inc.(META)$ laid off more than 4,200 US employees out of the 8,000 global layoff.

Wage Growth:

• On a brighter note, annual pay for those who stayed in their jobs increased by +4.4% YoY.

• However, this is an abnormally rather than a norm and those with pay increase is expected to have expanded role & responsibility, in the process.

May 2026’s ADP strong showing signaled sustained momentum going into Summer hiring season.

This reduces concerns about downside risks to the broader US labour market and at the same time, kills off remaining hope of the Fed cutting interest rate in H2 2026.

US ISM Services PMI

The US ISM Services PMI for May 2026 rose to 54.5 from 53.6 in April and surpassing the forecasted 53.8.

This marked the services PMI, strongest gain in 3 months, clearly indicating acceleration in service sector growth.

Report also revealed a sharp increase in (a) new orders (57.3) and (b) business activity (57.7). With May 2026’s data coming above 50, this indicates expansion in the service sector.

At the same time, a concerning spike in price pressures to 71.3, the highest since August 2022, with diesel, gasoline, oil and related commodities being once again most frequently mentioned as up in price.

Also, petroleum-related products were mentioned as a commodity up in price, a dynamic not seen back in April 2026.

Like it or not, latest report shows a vibrant & resilient health status of US services sector.

US Jobless Claims.

The 04 Jun 2026 claims report was mixed but still consistent with a solid US labour market, with the broader trend is softening a bit, but not enough to signal real deterioration.

(a) Weekly.

For week ending 30 May 2026, US weekly jobless claims rose by +13,000 to 225,000 vs market consensus of 214,000 and previous week’s downwards revised 212,000. (see below)

It is a slightly weaker print than expected, but still well within a range that historically reflects low layoffs rather than labour-market stress.

4-week moving average for new claims, which helps smooth out week-to-week volatility also rose by by +6,500 to 214,750 against expectations for 208,000 - showing that trend is moving up gradually rather than spiking.

(b) Continuing.

For week ending 23 May 2026, continuing claims fell by -8,000 to 1.777 million vs analysts’ estimates of 1.78 million vs previous week’s downwards revised 1.785 million.

Latest reading also remained near the recent trough zone, reinforcing the view that layoffs are not yet feeding into a meaningful rise in unemployment.

For markets, it is a slightly soft report on the surface because weekly claims missed expectations, but it is not a bad report in the macro sense because the underlying trend remains benign.

For a Fed-sensitive interpretation, this kind of data leans a touch dovish as it supports the idea of gradual labour cooling without a sharp deterioration.

In short: not a strong upside surprise, but still a healthy labour-market report overall.

US Non Farm Payroll (NFP).

US May 2026’s nonfarm payroll report was stronger than expected overall, with headline job growth beating consensus and prior months revised higher, even as the unemployment rate stayed flat.

The tone is still one of a labour market that is cooling gradually rather than breaking, that is why the report reads as supportive and not overheating. (see below)

Total NFP fell by -7,000 to 172,000 vs consensus forecast of about 80,000 vs April 2026’s upwards revised 179,000 (from 115,000).

Apart from April 2026’s upwards revision, March 2025’s data also was revised up to 214,000 from 185,000,

In total, 93,000 jobs have been “added” to the prior 2 months combined.

Indirectly, that means recent hiring trend is firmer than market had been assuming.

Unemployment and Labour force.

Unemployment rate held at 4.3%, in line with expectations and unchanged from April 2026.

US labour force participation rate stayed at 61.8%, and employment-population ratio edged up to 59.2%, suggesting US labour market was steady rather than deteriorating.

In other words, the stronger payroll gain was not accompanied by a meaningful loosening in labour conditions.

Wages and Hours.

Average hourly earnings rose +0.3% MoM and +3.4% YoY, both in line with expectations. Average workweek remained unchanged at 34.3 hours, that signals stable labour demand rather than broad pressure to cut hours.

Sector Data Analysis.

Job gains were concentrated in the following sectors:

• Leisure and hospitality added +70,000 jobs, a notable strong rebound vs its 12-month average.

• Local government added 55,000 jobs, giving the report a solid public-sector boost.

• Healthcare, continued to expand by 35,000, reinforcing its role as a durable employment support.

In contrast, financial sector activities declined.

NFP report’s key takeaway is US labour market remains healthy, with enough strength to surprise on the upside, but not so hot that it looks unsustainably strong.

My viewpoints: (mine only)

Personally, I think last week’s US economic reports threw hints that US economy is experiencing a clear re-acceleration, driven by strong expansions, rising new orders, and increased business activity across both manufacturing & services sectors.

Along with growth is the concerning resurgence in price pressures and raw material costs, affecting the lives of millions of US citizens, across the board - on a daily basis.

Last but not least, US labour market continues to show strength and resilience, characterized by the "low fire, low hire" narrative where surges in job openings and upside payroll surprises have been balanced by tech layoffs, moderating hiring rates, and low historical levels of actual job.

Despite the strong showings, US market had a big fall on Fri, 05 Jun 2026.

Below are the catalyst:

(1) May 2026 NFP.

The latest set of jobs number, including upwards revisions to March and April’s jobs’ numbers, proved that US economy is running hotter than assumed. In other words, inflation is real.

This ‘good’ news spooked US bond market immediately:

• US 10-year Treasury yield surged to 4.54%.

• US 30-year yield topped 5%.

For equity investors, this firm data effectively killed off any remaining hopes of Federal Reserve rate cuts in H2 2026.

Growth stocks that rely heavily on low borrowing costs, were hit the hardest.

(2) Semiconductor & AI Rout.

While NFP report set the macro backdrop, the velocity of the crash was a semiconductor story.

The $Philadelphia Semiconductor Index(SOX)$ plummeted over 10% in a single day, erasing over a trillion dollars in market value from tech giants.

• $Broadcom(AVGO)$: Faced heavy selling after releasing disappointing forward guidance earlier in the week. It fell more than 7% on Friday, following a steep decline the day before. (see below)

• $NVIDIA(NVDA)$: Slumped nearly -6% amid emerging market concerns regarding potential configuration adjustments to its upcoming AI memory modules.

• The Broader Sector: Other semiconductor stocks suffered massive liquidations as investors aggressively took profits out of the high-flying AI trade eg. $Marvell Technology(MRVL)$ (-16%), $Micron Technology(MU)$ (-13%), Intel(INTC) (-11%), and AMD (-11%) .

(3) Oil and Geopolitics.

• Very briefly, the underlying anxiety regarding the 3-month-old Middle East conflict kept oil prices elevated (WTI near $91/bbl and Brent near $94/bbl).

• It has reinforced the "higher-for-longer" inflation fears flagged already by spiking prices in both ISM Services and Manufacturing reports, out earlier in the week.

In the end, inflation fears colliding with sudden panic and aggressive profit-taking - erased $1.8 trillion from the S&P 500 and nearly $2 trillion from the broader US market, in just one day.

Actually, come to think about it - how much longer could the AI-driven rally have truly lasted ? Did it cross your mind ?

Remember to check out my other posts. (See below). Help to Repost ok, Thanks.

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