Nasdaq Under Pressure Following Fed Rate Hike and Robust US Labor Data

Key Facts

1US stock indices reacted negatively to the Federal Reserve's interest rate hike decision.

2The US labor market recorded job growth of 172K in May with upward revisions.

3Geopolitical tensions in the Middle East increased demand for the US dollar as a safe-haven asset.

In a move reflecting the central bank's commitment to curbing inflation, US stock indices reacted negatively to the Federal Reserve's decision to hike interest rates. According to reports, the US labor market recorded job growth of 172K in May, accompanied by upward revisions to previous figures. Furthermore, escalating geopolitical tensions in the Middle East have driven increased demand for the US dollar as a safe-haven asset, adding further pressure to high-risk equity positions.

This decline comes as global economic data shows mixed performance, with the Eurozone inflation rate hitting 3.2% in June per market data, exceeding official targets. Alongside the Nasdaq's weakness, Australia's GDP grew by 2.5% annually, highlighting the broader challenges to global growth in a high-interest-rate environment. The strength of US JOLTs job openings, which reached 7.618 million, has reinforced expectations that hawkish monetary policy will persist for longer than previously anticipated.

Traders should closely monitor Nasdaq support levels as market volatility continues, driven by ongoing Federal Reserve commentary. Looking ahead, investors are awaiting the release of the Services PMI data from China and the US on June 3, 2026, for insights into private sector resilience. Additionally, Bank of Japan Governor Ueda’s speech on the same day will be a critical catalyst for global liquidity shifts and major currency pair movements.