Is AI killing jobs – or adding them? It’s a debate that won’t be settled anytime soon. But the May jobs report we got this morning shows the labor market is doing just fine overall. That's fueling mixed trading in stocks, pushing gold and silver lower, and driving Treasury yields up.
Economists expected a gain of 85,000 jobs, but we got a 172,000 jump instead. Revisions added 93,000 jobs to previously reported figures, too. The unemployment rate held at 4.3%, while average hourly earnings rose 0.3% – both in-line with forecasts. Yields jumped on the news because it buries the idea of further Federal Reserve rate cuts even deeper underground.
Us Nonfarm Payrolls (Monthly Change in 1,000s)
Source: Trading Economics
Meanwhile, it’s not quite a “Great Rotation” YET, but we’ve seen an interesting "out-of-high-flyers, into-laggards" trade the last 36 hours or so. I go into more detail here, but suffice it to say that financials, healthcare, and other groups picked up the baton from technology and ran with it.
The catalyst: Broadcom Inc.’s (AVGO) blockbuster quarterly earnings weren’t quite enough to satisfy investors after such a big run in chip stocks. The leadership shift helped push the Dow Jones Industrial Average up 1.8% to a fresh record high.
Then late yesterday, S&P Dow Jones Indices said it would NOT join Nasdaq Inc. (NDAQ) and FTSE Russell in waiving index inclusion rules for soon-to-be-public mega-companies like SpaceX. Specifically, S&P said it would still require a 12-month, post-Initial Public Offering (IPO) “seasoning” period before SpaceX could be included in the S&P. It will also maintain standards on profitability and publicly traded float.
The move means billions of dollars in passive flows from ETFs that track the S&P won’t pour into SpaceX. Ditto for companies like OpenAI and Anthropic PBC expected to go public later in 2026. Bloomberg Intelligence pegged those potential inflows at $14 billion for SpaceX, $8 billion for OpenAI, and $4.6 billion for Anthropic. Still, waivers from the other index providers means SpaceX can join the Nasdaq 100 Index just 15 days after its IPO – and join Russell-branded indices just five days post-offering.
