Key facts
- U.S. stock futures were muted ahead of the June employment report.
- Chip stocks globally experienced a significant pullback.
- The U.S. jobs report is expected to show 110,000 jobs added in June.
- Euro zone inflation (CPI) was reported at 2.8%, below expectations.
- The yen strengthened significantly from a 40-year low.
U.S. stock futures showed little movement as the second half of the year began, with markets awaiting the crucial June employment report. A significant pullback in chip stocks globally, led by a 6% drop in the U.S. SOX index, added to market caution. Asia's tech and chip equipment makers followed suit. Meta was an outlier, rising on news of its cloud business expansion. OpenAI reportedly offered the U.S. government a 5% stake. The jobs report is expected to show 110,000 jobs added, a figure above the breakeven rate. Fed Chair Kevin Warsh reiterated the commitment to the 2% inflation target, while Fed futures still price in a potential rate hike by October. In Europe, euro zone inflation came in at 2.8%, below expectations, offering hope the ECB may avoid further hikes. The yen jumped sharply from a 40-year low amid speculation of Bank of Japan intervention.