Edward Meir's week in review and thoughts for the week of June 8, 2026

The S&P-500 ended down 2.6% for the week. The Dow proved more resilient, slipping by just 0.3%. Dow names were perceived to be better places to hide. Investors found relative safety in health care, utilities, consumer staples, and energy names. Meanwhile, the CBOE volatility index surged 40% last week to 21.51. The move highlighted a sharp rise in investor caution after months of unusually calm market conditions.

The first crack in the markets appeared on Thursday in the wake of a disappointing earnings report from Broadcom. This in turn raised questions about whether expectations about other high-flying AI and chip stocks were getting out of hand. Adding further impetus to Friday’s selloff was a stronger-than-expected US May employment report. It reignited concerns the Fed will need to keep monetary policy restrictive for much longer. Another possibility: the Fed could raise rates sooner than expected.

Treasury two-year yields climbed to a fresh high for the year at 4.16% on Friday (up 4 basis points for the week). Although the 10-year yield settled 2 basis points lower on the week (at 4.54%), yields nevertheless spiked by six basis points on Friday alone.

May jobs report

With regard to the May nonfarm payrolls report, we learned that jobs increased by 172,000, well above the 90,000 expected. Unemployment came in unchanged at 4.3%. Average hourly earnings rose 0.3% month over month (m/m) and 3.4% year over year (y/y). March and April payrolls were also revised higher, by a combined 93,000 jobs.

Among the various subcomponents, leisure and hospitality added 70,000 jobs. The surge is likely attributable to the World Cup tournament, which starts on Thursday. Elsewhere, local government hiring showed the biggest monthly gain in more than two years (at 55,000 jobs). Healthcare and social assistance sectors, meanwhile, created 47,000 positions. Construction posted modest gains for a third month in a row.

But retail, information, and finance sectors all shed workers in May (2,000, 1,000, and a fairly hefty 22,000 positions, respectively). Air transportation employment jobs declined by nearly 9,000, reflecting the collapse of Spirit Airlines. Separately, the May private payroll ADP number came in at 122,000, higher than the 110,000 expected. And although weekly initial claims rose by 13,000, overall claims remain at levels consistent with a solid labor market.

Energy and oil

In energy, we did not duplicate the sharp price declines we saw in the week prior. Instead, both crude contracts ended slightly higher. Intermittent skirmishes between US and Iranian forces kept sentiment unsettled. In addition, at one point last week, the Iranians said they would suspend talks with US in protest over Israeli strikes in Lebanon. But they were careful not to cut off communications entirely. President Trump subsequently arranged a cease-fire in Lebanon and also dissuaded the Israelis from attacking Beirut so as to get the talks with Iran unlocked. However, we continued to get reports of periodic fighting between Israeli and Hezbollah forces. And then Iran and Israel traded fire, so the cease-fire could very well unravel at any time.

By week’s end, WTI settled at $90.54 per barrel (bbl), up by about $3.30/bbl on the week. Brent finished at $93/bbl, up by about $1/bbl. Products ended mixed. Gasoline lost about $0.08/gallon. But distillates were up by about $0.05/gallon. Gasoline stocks are drawing rather sharply in recent weeks. The trend has contributed to talk that gas prices could be heading higher going into the busy summer season.

Base and precious metals

In precious metals, the rise in treasury yields strengthened the general dollar index last week. That, in turn, punished the precious metals group. Gold lost about $240 per ounce on the week (roughly 5%) to settle at $4,365/ounce. The bulk of that decline occurred on Friday alone. The gold charts now look quite poor. General support around $4,500/ounce level has been decisively taken out, with nothing much showing until the low $4000/ounce mark.

Silver did worse, losing roughly 10% on the week and settling below $70/ounce for the first time since late March. There were roughly 7% declines in both platinum and palladium. It rounded off a rather dreadful week for precious metals on the whole.

In base metals, prices ended mixed on the week. Copper ended pretty much flat basis the LME. But the CME copper contract lost about $0.10/pound, ending at $6.28/pound and narrowing the CME/LME arb in the process to the mid-$300/ton level. LME copper inventories are now at three-months lows. But CME stocks are bursting at the seams amid expectations of cathode tariff announcements that could come our way by this time next month. (More on that later).

Zinc prices were up by a modest 0.14%. Lead lost close to 1%. And aluminum ended pretty much flat w/w, but not before posting a fresh four-year high of $3,787/ton earlier in the period. Aluminum’s backwardation also narrowed compared to the week prior, a signal of easing concerns about nearby supply. Nickel had a rough week, ending down by 2.5%. Tin also lost the same amount. We should add that Friday’s weaker tone in chip stocks impacted tin and copper more than most. Both metals are perceived to be “commodity plays” in the AI space.

Going into this week, focus will remain on US equity markets as investors wait to see whether Friday’s selloff will intensify, in which case we could see knock-on price declines in a number of other complexes—including base and precious metals. It would be interesting to see whether an impending SpaceX IPO could potentially stabilize sentiment somewhat. For now, the energy markets seem to be walled off from US equities. Investors remain focused on the intractable conflict in the Gulf.

Trade and tariff news

In trade news, it was rather an eventful week. Late on Tuesday, the Trump administration proposed additional tariffs of up to 12.5% on imports from 60 countries on grounds that they had failed to curb trade in goods made with forced labor. There were numerous exemptions, including for imports already subject to Section 232 tariffs (steel, autos, aluminum, and copper). Also exempt are crude oil and petroleum products, rare earths, as well as beef, coffee, fruits and vegetables, pharmaceuticals, organic chemicals, and aircraft parts.

As a Reuters commentator pointed out: The outcome “is the result of contorting to comply with Section 301 of the 1974 Trade Act, which allows the president to impose tariffs to respond to labor abuses. The timing of the announcement gives away its real purpose: temporary 10% duties imposed after the Supreme Court’s February 20 decision were set to expire in the coming weeks, so the administration needed to find a new, legally insulated mechanism.” The 10% “labor abuse” tariff will also apply to imports from Canada, Ecuador, Indonesia, Mexico, Pakistan, Argentina, Bangladesh, Cambodia, El Salvador, Guatemala, Malaysia, Taiwan, and Britain. A duty of 12.5% will be levied on China, India, Nigeria, Japan, South Korea, Vietnam, Australia, and New Zealand.

Market reaction to this latest tariff announcement was subdued. Although equity markets sold off on Wednesday, the decline certainly did not approach anything we saw during “Liberation Day.” This may be because the surcharges contain a myriad of exemptions, thus diluting its impact. Moreover, investors could be expecting court challenges, which we think will materialize as trade lawyers get busy on the issue. The Office of the United States Trade Representative (USTR) will seek public comments on the tariffs through July 6, with a public hearing scheduled for July 7.

On another tariff front, President Trump last Monday moved to reduce import tariffs on HVAC systems, bulldozers, forklifts, mobile industrial equipment, and certain agricultural equipment, to 15% from 25%. Trump also lowered tariffs to 10% on products that are made in another country but that consist of at least 85% of US steel, aluminum, or copper as measured by weight (down from the previous minimum of 95%). The actions are effective June 8, 2026, until the end of 2027.

Reuters reports that this move “is [designed] to limit the collateral damage of trade wars, which have raised the prices for many inputs used in manufacturing, as well as equipment for farmers, construction companies and consumers”. Trump in a presidential proclamation said the adjustments “should incentivize increased use of American aluminum, steel, and copper in downstream derivative products.” The changes take effect June 8 and would run through the end of 2027.

We don’t view the 95%/85% tariff drawdown as being that significant. For one thing, the tariffs are short-term in nature. More importantly, the decreases are probably not enough to alter manufacturing compositions significantly, let alone incentivize additional domestic production beyond what is already on the drawing boards. Fuel and fertilizer costs are currently much more important concerns for both the US agricultural and manufacturing sectors than the makeup of imported components. And so we don’t see this latest round of tariff tinkering doing all that much.

That said, certain changes could be more immediately impactful. Case in point: Commerce Secretary Howard Lutnick recommended that two types of aluminum and steel (aluminum lithographic plates and steel racks) that were not currently subject to tariffs will get tariffed at prevailing rates. The reason? So as “to ensure that national security threats found in Proclamation 9704 and Proclamation 9705 are not undermined,” according to the proclamation.

For now, there have been no announcements regarding copper cathode tariffs. On the one hand, an additional postponement could see domestic prices, premiums, and the arb come under significant pressure. The 540,000-ton stockpile currently on hand (equivalent to roughly one-third of US annual refined consumption) would no longer be construed as necessary in its entirety. On the other hand, announcing a definite tariff timetable would likely draw in even more metal in. Copper consumers would want to secure additional units, mindful that copper premiums could push even higher as has been the case in aluminum.

Bloomberg speculates that a reasonable compromise will be one where President Trump would hold off on cathode tariffs but keep the door open to imposing them in the future, similar to what he did in July 2025.

Macro readings and other news from the past week

• Despite Friday’s selloff in several AI names, there seem to be few signs of easing in AI-related spending. Moody’s reports the number of planned US data-center projects reached 956 in May, up more than 40% from February levels. Capital spending on data buildouts is expected to reach about $700 billion this year, also higher than earlier projections.

• The Fed’s latest “Beige Book” found manufacturing activity increased in nine of the twelve districts it surveys last month. Employment showed little change in eleven. Prices rose at a moderate-to-strong pace as higher energy costs fed into freight and other inputs, squeezing margins in the process.

• The ISM manufacturing index rose to 54.0 from 52.7 in May. (However, the report did show continued contraction in employment for a second month in a row.) Seventeen industries reported growth last month, including wholesale trade, construction, public administration, accommodation, and food services, as well as utilities and retail trade. Only real estate, rental, and leasing reported growth contraction. As in comments from the Fed’s Beige Book, ISM respondents highlighted higher prices. “Suppliers across numerous industries are trying to pass price increases for fuel surcharges and increased input costs for resin-based products and the like.” Manufacturers also said that the “current atmosphere is one of extreme uncertainty and concern for the future in terms of both price stability and longer-term supply continuity.” Separately, the final S&P Global manufacturing PMI increased to 55.1 from 54.5.

• April factory orders jumped 4.8% m/m. But the headline numbers masked a weak month for business spending, evidenced by the 1.0% decline in nondefense capital goods orders, excluding aircraft. To be fair, that decline followed a strong 3.8% increase in March, so we might be seeing a pullback after such a large increase. “Orders for primary metals increased 2.0%, while bookings for fabricated metal products jumped 3.5%. Orders for machinery rose 0.7%. Electrical equipment, appliances, and components orders climbed 0.5%. There were also increases in orders for motor vehicle bodies, parts and trailers. But orders for computers and electronic products dropped 0.7%, with computers falling 2.5%,” a research note from Briefing.com noted.

• April construction spending rose by 0.4% m/m to a $2.172 trillion annual rate. Private residential spending increased 0.8%, while private nonresidential slipped 0.2%. Public construction rose 0.4%. New single-family construction spending increased a solid 1.4% in April but was still down 2.9% year-over-year. On a year-over-year basis, construction spending was up 0.9%.

• The May ISM services index rose to 54.5 from 53.6. Business activity and new orders both strengthening. Employment remained in contraction mode though, at 47.9, while prices-paid rose to 71.3, the highest since August 2022.

• US consumer credit increased at a 4.8% annual rate in April to $20.7 billion (expected at $17.5 billion). Revolving credit, which includes credit-card borrowing, surged 10.4%. Nonrevolving credit rose 2.9%, suggesting households are again making greater use of credit lines to get by.

• US light-vehicle sales ran at a 16.1 million annual rate in May, little changed from April and March levels. S&P Global Mobility expects full-year 2026 sales of about 15.8 million vehicles, about 3% below 2025 levels. That supports recent forecasts from many in the industry that the US auto market could remain broadly stagnant for a number of years.

• Citi raised its near-term copper price forecast to $14,500/ton from a previous forecast of $13,000/ton. It also upped its forecast for the next six to 12 months to $15,000/ton compared to $12,000/ton previously. “Lingering fears of U.S. tariffs on refined copper may support sentiment until at least the end-June review deadline,” the bank said. Meanwhile, Goldman Sachs also raised its year-end copper price forecast to $13,735/ton from $12,465/ton, citing a worsening supply outlook and tighter market balances.

• Global manufacturing output grew at its fastest pace since July 2021, S&P Global reported last week. The Eurozone’s PMI fell to 51.6 in May. But the number is not far from April’s near four-year high of 52.2. “Although Euroarea manufacturers reported an expansion for a fourth successive month in May, the sector is showing signs of struggling under the weight of rising prices and supply disruptions emanating from the war in the Middle East,” the chief business economist at S&P Global told Reuters. In Germany, the manufacturing sector stalled, while French factories saw a contraction for the first time since November. In Asia, China’s PMI reading rose for a sixth straight month, while South Korea’s hit its fastest expansion pace in five years. Japan’s factory activity slowed to 54.5 in May from 55.1 in April but remains strong. Nevertheless, Japanese firms reported the sharpest rise in input costs since September 2022. Finally, India’s manufacturing sector expanded at its fastest pace in three months, rising to 55 in May from April’s 54.7 reading.

This week’s US macro readings

Nothing will be scheduled for Monday. On Tuesday we get the April trade balance (expected at -$56 billion, last at $-60.3 billion) followed by May existing home sales (expected at 4.05 million annualized, last 4.02 million). Wednesday brings us the May CPI inflation reading (expected at 0.5%, last 0.6%), while the y/y estimate should come in at 4.2% (last 3.8%). The core CPI is expected at 0.4% m/m (last 0.6%). Thursday brings us weekly initial jobless claims (expected at 220,000, last 225,000) followed by May producer prices (expected at 0.6%, last 1.4%). The core PPI is expected at 0.4% m/m (last 0.6%). Finally, Friday brings us June preliminary consumer spending readings (expected at 4, last 44.8).

We wish all our readers all the best for the upcoming week.