245k Jobs, ECB Cuts to 2.25% & Nvidia Hits $3 Trillion
The US added far more jobs than expected. The ECB cut rates as Europe diverges from America. And Nvidia crossed a market cap milestone that would have seemed impossible five years ago.
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Finance Explained Simply The Brief 3 things that moved markets this week · 4 min read |
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01 Jobs ↑ Hot US Adds 245,000 Jobs in May — Far Above Forecast, Wages Up 4.1%. Rate Cuts Look Even Further Away. The US economy added 245,000 non-farm payroll jobs in May, crushing the 180,000 consensus estimate. The unemployment rate held at 3.9% and average hourly earnings rose 4.1% year-on-year. This is excellent news for workers, but deeply inconvenient for anyone hoping for rate cuts: the Federal Reserve cannot ease monetary policy while the labour market is this hot. Strong employment drives spending; spending drives inflation. Context: The US has now added an average of 210,000 jobs per month for 18 consecutive months — a pace that most economists believed impossible once rates hit 5%. | |
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02 Central Banks ↓ ECB Cuts ECB Cuts Rates to 2.25% — Europe and America Are Now on Diverging Monetary Policy Paths The European Central Bank cut its deposit rate to 2.25%, its sixth cut since June 2024. Eurozone inflation has fallen to 2.2%, close to the ECB’s 2% target, and the eurozone economy has barely grown for two years. The ECB has room to cut; the Fed does not. The result: the Euro has weakened against the dollar as European rates fall while US rates hold, making dollar-denominated assets more attractive. For UK readers: The divergence matters because a strong dollar raises the cost of UK imports priced in dollars (particularly energy), adding to domestic inflation pressure.
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03 Tech/AI ↑ Rally Nvidia Hits $3 Trillion Market Cap as AI Spending Surge Shows No Signs of Slowing Down Nvidia’s market capitalisation briefly crossed $3 trillion this week, cementing its status as the defining stock of the AI investment cycle. The company’s projected fiscal year 2026 revenue of $145 billion represents a 5x increase in three years, driven entirely by AI data centre chip demand from Microsoft, Amazon, Google, and Meta — who are collectively spending over $300 billion on AI infrastructure in 2026. The question nobody can answer yet: Whether the companies spending those hundreds of billions will generate enough AI-driven revenue to justify the investment. So far, cost is proven; revenue is still being built.
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