On June 5, emerging market assets fell for the third consecutive trading day, led by the South Korean stock market, as investor enthusiasm for artificial intelligence stocks waned. The MSCI Emerging Markets Index dropped 1.7% to 1728.66 points, with the South Korean KOSPI index plummeting by 7% at one point on Friday. Following Broadcom's AI chip sales outlook falling short of market expectations, chip manufacturers like Samsung Electronics and SK Hynix led the decline, with these two companies accounting for more than half of the market capitalization of the Korean composite index. After two consecutive weeks of gains, emerging market stocks and currencies are expected to record a weekly decline this week. Charu Chanana, Chief Investment Strategist at Saxo Markets, stated: 'Broadcom is a trigger that reminds the market how excessive expectations have become; investors have priced in many perfect expectations for AI, so even a small disappointment can lead to a significant revaluation. If the non-farm payroll data is stronger than expected, it may provide another excuse to cut AI investments.' (Jin Shi)
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Broadcom's Performance Triggers AI Overheating Alarm; Tonight's Non-Farm Data May Justify AI Investment Cuts
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US Stocks in AI Chip Sector Plummet, Intel, AMD, Qualcomm Down Over 5%
On June 5, US stocks in the AI chip sector collectively declined. Baidu fell over 6%, while Lattice Semiconductor, Intel, AMD, and Qualcomm dropped more than 5%. NXP and Broadcom fell over 4%, IBM, TSMC, and Cisco declined over 3%, and NVIDIA was down more than 2%. -
Nasdaq 100 Futures Drop 2% to 29,881.71 Points
On June 5, U.S. stock indices continued their downward trend, with the S&P 500 index declining by 1%, the Nasdaq composite falling by 1.6%, the Nasdaq 100 index dropping by 2%, and the Dow Jones Industrial Average decreasing by 0.3%. In terms of news, U.S. non-farm payrolls for May exceeded expectations, leading the market to price in further tightening of monetary policy by the Federal Reserve. U.S. interest rate futures indicate that the probability of a rate hike by the Fed in December has risen from 48% to 63%. -
BlackRock: The Fed May Still Rely on Market Forces to Move Forward
On June 5, BlackRock senior portfolio manager Jeffrey Rosenberg stated that whether the Federal Reserve will lead market pricing actions or be pushed forward by the market is still uncertain. Currently, it appears to be the latter. This leaves policymakers with only remedial measures. -
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U.S. Stock Market: Storage Sector Declines, SanDisk and Micron Technology Drop Over 5%
On June 5, U.S. storage sector stocks collectively fell, with Western Digital down over 7%, Rambus and Winbond Technology dropping over 6%, SanDisk and Micron Technology falling over 5%, and Seagate Technology down over 4%. -
Goldman Sachs: Employment is Not an Issue, Iran War Will Determine Fed's Next Move
On June 5, Lindsey Rosner, head of multi-sector fixed income investment at Goldman Sachs Asset Management, commented on U.S. non-farm payrolls: Recent data indicates that we are increasingly confident that the Federal Reserve does not need to worry about labor market issues. The Fed will 'focus on inflation issues, and ultimately, the duration of this (Iran) war will determine the Fed's next actions.' -
DeepSeek Tops Trend Chart
On June 5, according to a recent report from the American enterprise management platform Ramp, DeepSeek has reached the top of the 'Software Trend Chart.' This chart primarily tracks the initial procurement of software by enterprises from specific vendors, indicating that DeepSeek has become one of the fastest-growing software solutions on the platform. Ara Kharazian, Chief Economist at Ramp Economics Lab, stated that this may be the most apparent signal that (U.S.) companies are seeking low-cost alternatives to OpenAI and Anthropic, with some firms willing to adopt lower-priced Chinese large models. -
Federal Reserve's 'Echo Chamber': Non-Farm Report Indicates Reasons for Rate Cuts Have Largely Disappeared
On June 5, Nick Timiraos, often referred to as the 'echo chamber' of the Federal Reserve, pointed out that the acceleration of hiring activities this spring will provide more justification for Fed officials who are concerned about inflation and believe that current interest rates are too low to curb a new wave of price pressures. Some officials have recently suggested that the Fed should be prepared for interest rate hikes later this year, at least to reverse some of the three 25-basis-point cuts implemented in the second half of last year. These cuts were aimed at stabilizing the labor market, which now appears to be in much better condition than it was at that time. This employment report will not completely resolve the debate about how much the Fed should consider raising rates later this year, but it does further indicate that the reasons for rate cuts in the short term have largely disappeared. The more compelling reasons supporting rate hikes currently stem from the inflation outlook. Multiple shocks, including infrastructure development in artificial intelligence, tariffs, and energy, could keep inflation persistently above the Fed's 2% target, even if progress is made in restoring commercial shipping through the Strait of Hormuz. If the Fed remains inactive during a period of rising inflation, the real interest rates adjusted for inflation will decline. Even if the labor market is not the main driving factor, this mechanism could become an important element in discussions about raising rates. -
Spot Gold Falls Below $4,400
On June 5, spot gold fell below $4,400 per ounce, down 1.69% for the day. Spot silver also experienced a significant drop of 4.00%, currently reported at $70.90 per ounce.
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