US PPI inflation and job market cool down! The three major US stock indices drop slightly, while the US dollar index and US bond yields plummet.

The US job market and inflation have both cooled down. In the US, initial jobless claims last week were higher than expected, while continuing claims surged to the highest level since the end of 2021. The US May PPI rose 0.1% MoM, a mild increase that fell short of expectations, adding new evidence of "further slowdown in inflation". Traders have once again fully priced in expectations for two US Fed interest rate cuts this year, with the first cut potentially occurring in September.

Following the data release, the US dollar index and US Treasury yields fell sharply, with the US dollar touching a three-year low, spot gold rising, and US stock futures paring losses. Market attention will now turn to the $22 billion auction of 30-year US Treasuries to observe whether investors will shy away from such long-term bonds amid a backdrop of expanding fiscal deficits.

Below are the trends of core assets:

• The three major US stock indices fell slightly, with the Dow Jones Industrial Average down 0.36%, the S&P 500 down 0.2%, and the Nasdaq down 0.2%.
• European stocks rebounded slightly in tandem with US stocks. German stocks are now down about 0.8%, after earlier falling more than 1.3%.
• South Korean stocks have risen for seven consecutive sessions. Israel's TA-35 index once fell about 1.7%, marking its biggest drop in two months.
• The US dollar index once fell more than 1%, the euro rose more than 1.2%, the British pound rose about 0.5%, and the yen appreciated about 1%.
• US Treasury yields fell across the board, with the 2-year and 10-year yields once falling more than 8 basis points.
• Spot gold extended gains to more than 1%, while spot silver nearly erased earlier losses of more than 1.7%.
• Both US crude and Brent crude fell more than 1.6%.

US inflation remained mild in May, indicating that current tariffs have not significantly pushed up consumer prices. The market generally expects the US Fed to keep interest rates unchanged at its meeting next week, waiting to observe the impact of Trump's policies on the economy.

In the stock market, after the release of PPI and employment data, US stock futures pared losses in pre-market trading. At the start of US trading, the three major indices fell slightly, with the Dow Jones Industrial Average down 0.36%, the S&P 500 down 0.2%, and the Nasdaq down 0.2%.

After the S&P 500 rebounded more than 20% from its April low, trading activity in the stock market began to show signs of fatigue.

Most Chinese concept stocks fell, with Bilibili down about 1%. Most tech stocks also fell, with Tesla down about 1%.

CureVac rose about 35% after reports that BioNTech would acquire the biotech company for $1.25 billion to boost its cancer business.

Oracle's shares rose 8.2% to their highest level since January 22.

Boeing's shares fell by approximately 5% following the first air crash involving a Boeing 787 aircraft.

In the foreign exchange market, the US dollar index fell below 98, dropping more than 1% to a three-year low after the PPI release, before narrowing its losses to less than 0.8%.

Following the PPI data, the euro surged more than 1.2% at one point and is now up over 0.8%.

The UK economy experienced its most severe contraction in 18 months, with expectations for an interest rate cut soaring. The British pound fell by approximately 0.2% at one point. After the PPI data release, it rose more than 0.5% at one point and is now up about 0.4%.

In the bond market, US Treasury yields plummeted significantly. After the PPI data release, yields on both 2-year and 10-year US Treasuries fell more than 8 basis points at one point.

In the commodities market, spot gold surged more than 1.1% after the PPI data release, before narrowing its gains to less than 0.9%. Spot silver turned positive, having previously fallen approximately 1.7%, and is now down about 0.2%.

Both WTI and Brent crude are now down more than 1.5%. Catalyzed by news of US-Iran tensions, oil prices surged 5% on Wednesday, only to pull back on Thursday.

According to Global Times, Iran has threatened to attack US military bases, and the US expects Iran to retaliate against certain US military bases in Iraq. Oman has confirmed that the sixth round of US-Iran nuclear talks will be held on Sunday.