US jobs growth lifts Wall Street as trade-talk optimism builds

Jobs growth and trade talks drive US market gains

United States (US) equity markets gained last week, buoyed by a stronger-than-expected jobs report on Friday night and President Donald Trump's announcement that US and Chinese officials will hold trade talks this week.

The trade talks began in London overnight and are ongoing, focusing on resolving disputes over tariffs, rare earth mineral exports, technology restrictions and student visas.

China appears to have approved increased rare earth exports, signalling goodwill, but no major tariff breakthroughs or comprehensive agreements have been confirmed. This leaves US equity markets, which are pricing in further de-escalation in trade tensions following the trade talks in Geneva last month, on edge.

US jobs report insights

Friday night's much-anticipated jobs report revealed the US economy added 139,000 jobs, exceeding the 125,000-consensus expectation. However, the impact was tempered by a cumulative downward revision of 95,000 for the previous two months.

Meanwhile, the household survey showed the unemployment rate remained steady at 4.2% due to a decline in the participation rate to 62.4% from 62.6% previously. Without the fall in the participation rate, the unemployment rate would have risen above 4.5%.

Upcoming economic releases

• US consumer price index (CPI) report for May
• Producer price index (PPI)
• The preliminary reading of the Michigan consumer sentiment index for June.

Federal Reserve (Fed) speakers are now in the blackout period ahead of next week’s Federal Open Market Committee (FOMC) meeting.

US CPI

Date: Wednesday, 11 June at 10.30pm (AEST)

In April, headline inflation rose 0.2% month‑on‑month (MoM), easing the annual rate to 2.3% year‑on‑year (YoY) from 2.4%, marking the lowest level since February 2021. Core inflation also rose 0.2% MoM, aligning with forecasts for 2.8% YoY.

Last week, Fed speakers including Christopher Waller, Raphael Bostic and Lisa Cook expressed caution on the inflation outlook and potential interest rate cuts. Concerns were largely driven by uncertainty surrounding Trump’s trade tariffs and their dual risk of fuelling inflation while slowing economic growth. 

Waller noted that if tariffs remain moderate (around 10%) and underlying inflation continues to track towards the Fed’s 2.0%target, he would support 'good news' rate cuts later in the year.

For May, headline CPI is expected to rise 0.2% MoM, lifting the annual rate to 2.5% YoY. Core inflation is forecast to increase 0.3% MoM, taking the annual rate to 2.9% YoY. The US rates market is currently pricing in a 65% chance of a 25 basis point (bp) Fed rate cut in September, with a cumulative 45 bp in rate cuts expected by year‑end.

US core inflation rate chart

US tech 100 technical analysis

Following the US Tech 100's surge higher on 12 May, we have been working with the view that the rally in the US Tech 100 from the 21 April 17,592 low is a Wave III (Elliott Wave). This should be followed by a wave IV pullback.

The bearish engulfing candle that formed last Thursday suggests Wave III is likely close to completion. A sustained break of support at 21,500 would suggest Wave IV is underway. This should take the US Tech 100 back toward the support coming from the 200-day moving average (MA) in the 20,500 - 20,400 area.

Provided this support holds, it should then be followed by another leg higher for Wave V to retest the record 22,222 high.

US tech 100 daily chart

US 500 technical analysis

Following the US 500's surge higher on 12 May, the view was that the rally in the US 500 from the 21 April 5101 low was a Wave III (Elliott Wave). This should soon be followed by a Wave IV pullback.

In our latest update, we are on the sidelines as to whether the push to the 6021 high overnight counts best as a part of Wave III or Wave V. We note that the bearish divergence viewed on the relative strength index (RSI) is more often seen in the latter (Wave V’s).

Either way, what we would like to see now is a pullback toward the 200-day MA at 5800 and the late May low of 5767. Provided this 5800 - 5770 support area holds, it should then be followed by another leg higher for Wave V to retest the record 6147 high.

US 500 daily chart

• _{Source: TradingView. The figures stated are as of 10 June 2025. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}