Weekly Market Review - 08 June 2026

Global equities were mixed, as AI optimism faded and geopolitical tensions continued to bubble away in the Middle East. Japanese equities fared best, while UK equities lagged due to global trade uncertainty.

US: EQUITIES DECLINE AS AI OPTIMISM FADES AND JOBS DATA SURPRISES TO THE UPSIDE

Major U.S. stock indices ended the week lower, led by a 4.68% drop in the Nasdaq, with declines also in the Russell 2000 and S&P 500, the latter posting its first weekly loss since March. Early gains driven by artificial intelligence (AI) optimism faded as investors weighed oil price volatility, high AI-related earnings expectations, increased equity issuance, and a stronger-than-expected May payrolls report that reinforced expectations that the Federal Reserve may keep policy restrictive.

The U.S. added 172,000 jobs in May, far exceeding forecasts, with April figures revised higher, while the unemployment rate held at 4.3%, signalling resilience despite mixed indicators such as rising jobless claims and increased layoffs linked partly to AI. Economic data, including Purchasing Manager Index (PMI) readings, pointed to solid activity alongside persistent inflation pressures, with both manufacturing and services expanding and prices continuing to rise. Bond yields climbed, with the 10-year reaching about 4.55%.

JAPAN: EQUITIES MIXED AS ELEVATED ENERGY PRICES KEEPS THE OUTLOOK FOR RATES FIRMLY IN FOCUS

Japan’s equity market was mixed, with the Nikkei 225 up 0.39% and TOPIX down 0.20% as investors stayed cautious amid geopolitical tensions and rising energy prices. Expectations of a June rate hike grew after hawkish comments from BoJ Governor Kazuo Ueda, while stronger than expected wage growth contrasted with weak consumer spending, which fell for a fifth straight month. Meanwhile, the yen weakened toward JPY 160 per dollar, prompting fresh warnings of possible intervention from authorities.

CHINA: EQUITIES MIXED AS SIGNS OF UNEVEN ECONOMIC RECOVERY SHOW

China’s equities fell over the week, with the CSI 300 down 1.54%, Shanghai Composite off 1.00%, and Hang Seng slipping 0.88%, as investors weighed uneven economic signals. PMI data showed mixed momentum. Official manufacturing stalled, while private sector activity remained stronger, supporting expectations for targeted policy support. Meanwhile, AI developments, including Tencent’s WeChat initiatives and DeepSeek’s potential fundraising, provided a bright spot.

EUROPE: EQUITIES WEAKER AS GEOPOLITICAL CONCERNS CONTINUE

European equities were mixed as markets lacked clear direction amid geopolitical developments and trade concerns, including potential U.S.–Iran negotiations, a possible Israel–Lebanon ceasefire, and plans by the U.S. administration to impose new tariffs of 10% to 12.5% on many countries. Among major indices, Germany’s DAX declined 1.38%, Italy’s FTSE MIB fell 0.29%, and France’s CAC 40 rose 0.43%.

Economic data showed the eurozone economy contracted by 0.2% in the first quarter, revised down from earlier growth estimates, with Ireland experiencing a sharp 12.1% decline. Retail sales in the eurozone dropped 0.4% in April, driven by weaker non-food sales, although France saw a modest increase. France’s industrial production edged up slightly and its trade deficit narrowed due to stronger exports.

UK: EQUITIES DECLINE MODESTLY ON GEOPOLITICAL UNCERTAINTY

The UK market saw modest declines during the week, with the FTSE 100 Index slipping 0.40% amid broader investor caution driven Despite the subdued equity performance, domestic economic data showed some strength, particularly in the automotive sector, where new car sales rose 7.1% year over year in May, the highest level for the month since 2019. This growth was driven by strong demand for electrified vehicles, with plug-in hybrid sales increasing by 23.9% and battery electric vehicle registrations surging 34.2%, even as traditional petrol and diesel car sales declined.

Weekly What's Important Next: Week 8 June to 12 June 2026

SpaceX IPO

On Friday, SpaceX will IPO.

Why it's important

The IPO is set to be the largest ever and would place the company among the world's top ten by market capitalisation. As a result, it is likely to be taken into tracker funds very quickly, adding further weight to technology and, in the case of SpaceX, increasing AI exposure even more. It may take longer to enter the S&P 500, given the requirement for a sustained period of profitability, but its presence will still be felt across the market. The bottom line is that the US equity market is becoming increasingly concentrated around a single theme, namely AI. As Friday's sell off showed, this level of concentration can lead to a sharp and rapid reappraisal.

US CPI

On Wednesday, we receive US Consumer Price Index inflation data, which is expected to rise from 3.8% to 4.2%.

Why it's important

We all knew that the closure of the Strait of Hormuz would be inflationary. What we did not know was how long it would last or what the actual impact on inflation would be. As the conflict has dragged on, concern around inflation has continued to build. Early signs suggest that inflation is becoming increasingly embedded in the US economy. This will be closely monitored for further detail. The more embedded it becomes, the more likely it is that the US will need to raise rates sooner. That is generally not a positive backdrop for equity markets.

ECB Meeting

The ECB meets on Thursday and is expected to increase rates from 2% to 2.25%.

Why it's important

The ECB is expected to raise rates, and it matters as this would make it the first of the major central banks, alongside the Bank of Japan, the Federal Reserve and the Bank of England, to do so. Across all of these regions, markets are already pricing in rate hikes before year end. The fact that the ECB may move now will be watched closely, particularly in terms of what has driven the decision. In other words, what has shifted relative to what is already priced in, and what has prompted the ECB to act at this point? As noted earlier, rising rates are typically a headwind for equity markets. If investors begin to believe that other central banks will follow and raise rates sooner rather than later, there is a risk of a more meaningful correction. This is especially the case in the US, where valuations are high and market concentration remains elevated. This update reflects Omnis’ view at the time of writing and is subject to change. The document is for informational purposes only and is not investment advice. We recommend you discuss any investment decisions with your financial adviser. Omnis is unable to provide investment advice. Every effort is made to ensure the accuracy of the information, but no assurance or warranties are given. Past performance should not be considered as a guide to future performance.