Today
Middle East flareups combined with Friday’s selloff following a much stronger-than-expected jobs report and concerns about Fed tightening, would be enough to put markets on edge, but apparently not. Futures are up this morning, with all major North American indexes moving higher. Overseas, the mood was less optimistic, with markets under pressure across both Asia and Europe. Losses in South Korea were severe, with the Kospi falling more than -8%, weighed down by Samsung and SK Hynix, the latter continuing to retreat from the US$1 trl valuation it reached only weeks ago. Providing some support to U.S. futures are
Marvell and Flex after both were selected for inclusion in the S&P 500 effective June 22. Departing the index is The Campbell’s Company, one of the index’s original constituents. Another sign of the times, although history suggests today’s market leaders are not always tomorrow’s.
Tensions in the Middle East escalated over the weekend, raising concerns around the sustainability of the U.S.-Iran peace negotiations. Israel carried out its first strike on the outskirts of Beirut since a U.S.-backed Lebanon ceasefire proposal was announced last week, targeting areas linked to Hezbollah after rockets were fired into northern Israel. Iran launched missiles toward Israeli targets and warned that both Israeli assets and U.S. military bases remain legitimate targets if ceasefire agreements continue to be violated. While the situation remains fragile, Iran announced this morning that its retaliatory military operations had concluded, helping ease some concerns around escalation. Iran’s decision to halt attacks and Trump’s comments supporting an immediate ceasefire suggest both sides remain interested in avoiding a wider escalation. Markets are likely to remain sensitive to these developments though, with any renewed military escalation rising delays to reopening key shipping routes, keeping energy prices elevated, and adding to inflation pressures that have already complicated the outlook for central banks and global economic growth.
Stocks in the U.S. suffered its worst selloff in months on Friday as investors took profits in AI and semiconductor stocks following a stronger-than-expected jobs report and rising bond yields. The Nasdaq fell -4.2%, its largest one-day decline since the tariff-driven volatility of early 2025, while the S&P 500 declined -2.6% and the Dow lost nearly 700 points. The selling was concentrated in semiconductor stocks, with the Broadcom earnings report acting as an initial catalyst after management failed to raise its AI outlook despite strong results. The decline intensified as Treasury yields rose following a surprisingly strong U.S. employment report showing 172,000 new jobs versus expectations of 88,000, increasing concerns that the Fed may need to keep rates elevated or even raise them further. The semiconductor sector was hit hard, with shares of Micron Technology falling -13%, Advanced Micro Devices and Intel dropping about -11%, and semiconductor ETFs seeing their worst day since March 2020. Despite the pullback, semiconductor stocks remain up nearly 80% this year, reinforcing the view that the selloff reflects profit-taking and valuation concerns rather than a fundamental deterioration in the AI investment theme.
Competing for capital. The recent selloff in AI stocks and crypto comes ahead of the highly anticipated SpaceX IPO, highlighting competition for investor capital and raising questions about whether the market’s appetite for risk is fading. While the immediate catalyst for Friday’s selloff was rising bond yields and profit-taking in semiconductor stocks, investors are also preparing for what could become the largest IPO in history, with SpaceX expected to debut at a valuation exceeding US$1.8 trillion. Some strategists believe investors are selling AI stocks, crypto, and other momentum trades to free up capital for the offering, as retail investors now account for ~20% of U.S. equity trading volume. With today’s market offering more speculative alternatives than previous cycles, including crypto, leveraged ETFs, prediction markets, and AI-themed investments, some have noted that even a blockbuster IPO must compete for investor attention and capital. Whether SpaceX attracts new money or redistributes existing capital could be a test of the durability of the current bull market and the retail-driven enthusiasm that has powered many of its biggest winners.
The euro is approaching a potentially important technical inflection point against the U.S. dollar after weakening steadily throughout this year. The currency has faced pressure from a combination of higher energy costs related to the Iran war, safe-haven flows into the U.S. dollar, and weaker economic performance in Europe relative to the U.S.. From a technical perspective, analysts are focused on a possible head-and-shoulders topping pattern, which is often viewed as a sign that a longer-term uptrend may be ending. The key level to watch is approximately 1.1425 against the dollar, with a convincing break below that level potentially opening the door to a move toward the 1.08–1.09 range. Additional warning signs include weakening momentum indicators, as the euro failed to generate stronger momentum despite reaching a multi-year high in January, and contracting Bollinger Bands, which can signal the end of a prior trend.
Canada is in a technical recession by one common definition, as real GDP contracted for two consecutive quarters, including a -0.1% annualized decline in Q1 following a -1.0% decline in Q4 2025. However, economists say the label is misleading because the downturn has not been broad or severe enough to meet the traditional definition of a recession, which requires weakness that is pronounced, pervasive, and persistent across the economy. Recent data paints a mixed picture. While GDP has been weak, Stats Canada’s preliminary estimate suggests growth rebounded by 0.4% in April, and the economy added 88,000 jobs in May, pushing the unemployment rate down to 6.6%. The C.D. Howe Institute Business Cycle Council, which is often viewed as Canada’s unofficial recession caller, said it is too early to classify the current slowdown as a recession. Economists also note that unusual factors like U.S. trade uncertainty, lower immigration, government spending restraint, and shifting global supply chains, are distorting traditional economic indicators. While growth is weak and many Canadians continue to feel financial pressure, the evidence according to economists, currently points toward a soft patch or technical recession rather than a full-scale economic downturn.
A drought nearing an end? The NBA Finals return to New York tonight for the first time in 27 years, with the Knicks just two wins away from their first championship since 1973. While not quite in Leafs territory, the drought has lasted long enough that many fans have never seen their team win. There is also plenty beyond basketball itself to watch. In addition to Madison Square Garden hosting its first Finals game in a generation, many are also eager to see Victor Wembanyama, whom some view as the league’s next global superstar, play his first Finals game in New York. Adding to the spectacle, Trump is expected to attend, becoming the first sitting president to attend an NBA Finals game. Trump has developed a habit of showing up at the country’s biggest sporting events including last year’s Super Bowl, another first for a sitting president. For fans, that means more security, road closures, and airport-style screening that accompany a presidential visit. Fans willing to brave all of that will also need deep pockets, with the cheapest tickets selling for more than $6,000 and lower-bowl seats approaching an eye-watering $90,000…in U.S. dollars no less.
Diversion: Say cheese! 
