Weak US jobs data and AI chip news shakes tech

Summary

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Podcast Summary

Podcast: Moving Markets by Julius Baer
Episode: Weak US Jobs Data and AI Chip News Shakes Tech
Date: July 3, 2026
Host: Helen Freer
Guests: Mike Rauber, Tim Gagy

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Episode Overview

This episode provides a concise yet comprehensive look at the latest global financial market movements with a special focus on the impact of weak US jobs data and dramatic developments in the AI chip sector. The discussion breaks down reactions across major financial markets, dives into movements in currencies and metals, and highlights the contrasting fortunes of tech in the US and Asia. Investment implications and tactical opportunities are explored, all in the familiar analytical tone of Julius Baer.

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Key Discussion Points and Insights

1. US Jobs Data and Market Reactions

• Disappointing US Jobs Report:

  • June saw only 57,000 jobs added versus 129,000 in May, missing expectations of 115,000.
  • The labor force participation rate fell to its lowest point in 50 years outside the COVID era.
  • Previous months’ numbers were revised down, suggesting deeper malaise.
  • “The data was quite stark... an indication that job seekers are giving up.” (Mike Rauber, 00:54)

• Market Response:

  • Fed rate hike expectations for September dropped below 50%.
  • Short-dated Treasury yields fell; dollar slid against all major developed currencies; gold surged.
  • US equity performance diverged: the Dow hit another all-time high (+1.1%), while S&P 500 was flat due to tech sector drag.

2. The Shockwave from AI Chip News

• AI Chip Competition Intensifies:
  • Report: Entropic, an emerging AI leader, is developing its own chip and in talks with Samsung as a manufacturer.
  • This innovation threat triggered a sharp selloff in semiconductor stocks:
    • Philadelphia Semiconductor Index dropped over 5%.
    • SanDisk suffered most, plunging 14% (yet still +635% YTD).
  • Broader tech stocks also fell: Tesla -7% (despite strong delivery numbers), Meta -5%.
  • Nasdaq closed down 0.8%.
  • “The news pummeled semiconductor stocks... showing how significant they are for broader US equity market performance.” (Mike Rauber, 01:48)

3. European Markets and Policy Moves

• European Equity Rally:

  • DAX surged over 2%, bolstered by softer US rate hike expectations and a drop in oil prices (Brent crude nearing $70/bbl).
  • German government announced tax cuts (€10 billion) and pension reforms to spur economic growth and competitiveness.
  • “Passing of the package renewed optimism that structural reforms could improve Germany's and the region's growth outlook.” (Mike Rauber, 02:44)

• Company Highlights:

  • Rheinmetall rebounded +6% after an international order for its Skynex air defense system.
  • LVMH up 3.5% amid general luxury sector strength.

• Swiss Update:

  • Swiss inflation slowed to 0.5% in June, far below the Euro area’s 2–3%.
  • Attributed largely to the strong Swiss franc keeping import prices in check.
  • Economic effects may shift if safe haven demand and rate differentials change.

4. Asia's Contrasting Tech Fortunes

• Tech Stocks Surge in Asia:
  • Samsung soared almost 8% on the Entropic news, SK Hynix also up, fueling a 6% jump in South Korea’s KOSPI index.
  • Japanese and Chinese equities up around 1%, buoyed by robust services PMI data (Japan: 52.2, China: 54.1).
  • “Tech and AI-related exports remain key growth drivers... but the data also shows that there is strength in services which is more domestic in nature.” (Mike Rauber, 04:31)

5. Markets Ahead and Political Risk

• Calendar & Outlook:
  • Markets are likely to be quiet with US markets closed for July 4th (250th anniversary).
  • Eyes on potential Trump administration maneuvers to reshape the Fed, possibly removing current board members to favor political appointees.
  • European data to watch: services PMIs.

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Currency & Metals: Expert Views (Tim Gagy Segment)

6. FX Market Reactions & Outlook

• Dollar Drop in Context:
  • Weaker US jobs pushed traders out of long dollar positions after several weeks of strength.
  • “What a difference a data point makes... the payrolls number was pretty disappointing. It makes sense that people sold dollars…” (Tim Gagy, 06:22)
  • Expects lower trading ranges for dollar pairs, but cautions about volatility of market conviction:
    • “The market is brilliant at one thing: being really highly confident about an outcome, then being equally really highly confident about a totally different outcome a short while later.” (Tim Gagy, 06:49)
  • Inflationary pressures not resolved; one set of data doesn’t mean a trend change.

7. Precious Metals Performance

• Gold Rally:
  • Gold back to nearly 4,200.
  • Tim sees potential for more sustainable gains:
    • Speculative longs may have been cleansed, which could provide firmer footing.
    • Key support at 4,000, resistance 4,400–4,500; big moves above 4,500 would make him “much more nervous.”
    • “A healthy situation for gold would be to stabilize around current levels... flying back up above 4,500 would make me… less optimistic.” (Tim Gagy, 08:32)

8. Tactical Opportunities

• Currency Calls:
  • Still sees value in Australian dollar and Canadian dollar at current levels.
  • Suggests buying puts on USD/JPY to tactically play potential Bank of Japan intervention around low liquidity.
  • Not inclined to add to dollars yet and remains gold-focused among metals.

9. Lighthearted Moment

• Podcast Personality:
  • Tim closes with a pun about his wife’s gardening attire, keeping the segment grounded and relatable.
  • “I went outside to tell my wife that her outfit was just not appropriate for gardening. She told me I didn't know what I was talking about. She's really digging in her heels.” (Tim Gagy, 10:35)

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Notable Quotes by Timestamp

• US Job Market Summary:

  • “The data was quite stark... an indication that job seekers are giving up.” – Mike Rauber (00:54)

• Market Pivot on Rate Hikes:

  • “People sold dollars, especially considering everyone had bought quite a few dollars in the previous couple of weeks.” – Tim Gagy (06:22)

• On Market Sentiment Swings:

  • “The market is brilliant at one thing, and that is being really highly confident about an outcome, then being equally really highly confident about a totally different outcome a short while later.” – Tim Gagy (06:49)

• On Gold Dynamics:

  • “A healthy situation for gold would be to stabilize around the current levels... flying back up above 4,500, this would make me much more nervous.” – Tim Gagy (08:32)

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Important Timestamps

• 00:29–01:46: US Jobs data and market reactions (Mike Rauber)
• 01:48–02:30: AI chip news and tech stock fallout (Mike Rauber)
• 02:30–03:37: European equities and economic policy moves (Mike Rauber)
• 03:37–04:18: Swiss inflation and currency dynamics (Mike Rauber)
• 04:18–05:15: Asia’s outperformance led by tech and services data (Mike Rauber)
• 06:14–07:45: Dollar weakness and shifting FX expectations (Tim Gagy)
• 07:45–09:09: Gold’s rally and sustainability (Tim Gagy)
• 09:15–10:47: Tactical FX and metals plays, market humor (Tim Gagy)

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Conclusion

This episode delivers a well-structured snapshot of how key economic data and sector-specific news—especially weak US job growth and a shakeup in the AI chip space—are setting the tone for asset markets. With contrasting market performance in the US, Europe, and Asia, and timely tactical perspectives from Julius Baer’s experts, listeners come away with a brisk yet insightful guide to navigating fast-changing conditions in FX, equities, and metals. The tone remains conversational and pragmatic throughout, mixing data-driven analysis with the lived reality of market psychology.

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Transcript

[A]

Good morning everyone and welcome to Julius Baer's Moving Markets Podcast. It's Friday 3rd July and my name is Helen Freer. As always, we will kick things off today with the latest financial market news this morning provided by my colleague Mike Rauber. And then I'll be catching up with Tim Gagy on the latest moves in FX and metals markets. But first up with the market news it is Mike. Good morning, Mike.

[B]

Good morning, Helen.

[A]

Let's start with the US Jobs report that we got yesterday which showed that job growth slowed in June with employers adding 57,000 jobs versus 129,000 in May. And it was also much lower than the expected figure of 115,000. Job creation in the two prior months was revised lower as well. What else can you tell us on this Mike?

[B]

The data was quite stark in that it also showed labor force participation rate falling to the lowest in 50 years outside of the COVID era, seen by an economist as an indication that job seekers are giving up. So this meant that traders reduced expectations of a Fed rate hike with the probability of a September rate increase now below 50%, leading short dated treasury yields to fall. Yesterday the dollar slid against all developed world currencies and gold rose. But it did help most US stocks. The Dow Jones Industrial Average climbed 1.1%, hitting all time highs. Two out of three stocks in the S&P 500 advanced, but the index overall was flat due to a rout in chip makers showing how significant they are for broader US equity market performance.

[A]

Okay, and why was that?

[B]

The magazine the Information reported that Entropic has started early stage work on its own AI chip and held talks with Samsung Electronics as potential manufacturing partner. The news pummeled semiconductor stocks. The Philadelphia Semiconductor index fell more than 5%. SanDisk was hit the hardest, declining 14%, but that leaves the stock still up 635% this year. Now yesterday other major technology stocks also declined with Tesla down over 7% despite strong deliveries report and Meta fell 5% leaving the Nasdaq 0.8% lower on the

[A]

day and moving over to Europe. Equity markets here rallied, led by the DAX that gained more than 2%. Apart from lower US rate hike expectations, what else drove the gains?

[B]

Lower oil prices helped sentiment with Brent crude briefly approaching $70 per barrel midday yesterday, easing pressure on Europe's energy intensive economy. In Germany, the ruling coalition announced tax cuts of up to 10 billion euros and pension reforms aimed at boosting growth and competitiveness. The package or the passing of the package, renewed optimism from earlier in the year that structural reforms could improve Germany's and the region's growth outlook.

[A]

And there were also some strong single names, right?

[B]

Indeed, Rheinmetall rose over 6% after securing an international order for its advanced Skynex air defense system. Remember earlier this week the stock plunged as it lost a large shipping order from the German government. The French luxury maker LVMH rose 3.5% on strength in in luxury names.

[A]

And in Switzerland, inflation slowed to 0.5% in June, so that's still well within the SNB's 0 to 2% target range. Swiss inflation is still running well below the euro area's 2 to 3% range. What's driving the difference here Mike?

[B]

Just looking at the Swiss franc. Its strength has certainly contributed to keeping Swiss inflation low by making imports cheaper and limiting the impact of higher oil prices in the near term. The Swiss franc could however, experience a soft patch amid less safe haven demand and its wide interest rate disadvantage. Our economists noted yesterday Moving over to Asia.

[A]

Now there the picture is somewhat different to the US and Europe in that chips and tech stocks are among the winners. The MSCI Asia Pacific index is up 1.8% today.

[B]

Yeah, so Samsung Electronics is up nearly 8% on the anthropic news, while SK Hynix is also higher, helping lift South Korea's cost by more than 6%. So it's continuing with sharp moves we've seen all week. In Japan and China, major equity indices are up around 1%. They are supported by stronger economic data. Japan services PMI rose to 52.2 in June from 50 while China's remains strong at 50 54.1 signaling continued expansion now while technology and AI related exports remain key growth drivers for the region. The data also shows that there is strength in services which is more domestic in nature.

[A]

Okay, and today then, what do we have coming up?

[B]

The economic calendar is light with the US closed ahead of tomorrow's 4th of July 250 year anniversary. So happy Birthday. Besides the grandiose speeches, be also on the lookout for the Trump administration renewing a push to reshape the Fed, actively exploring ways to remove members including Lisa Cook and Jerome Powell to clear the way for more of the President's own picks. President Trump told CNBC that Kevin Warsh is facing a board that is a bit hostile and in economic data releases in the Eurozone and the UK will get services. PMI and lastly, European equity futures are slightly in the green on this last day of the trading week.

[A]

Wonderful. Thanks a lot Mike for the great Roundup this morning.

[B]

Thank you very much for having me, Helen.

[A]

And now over to you, Tim. Good morning. Welcome back to the podcast.

[C]

Thank you Helen. Good morning.

[A]

The dollar is a lot weaker following yesterday's non farm payrolls number. Does this make sense to you?

[D]

Yeah.

[C]

What a difference a data point makes. The payrolls number was pretty disappointing. No World cup bounce and a revision lower to the main number. Earnings were steady and the unemployment rate looks kind of okay ish at 4.2%, but nonetheless it is not what the market was expecting. So as a reaction, therefore it makes sense that people sold dollars, especially considering everyone had bought quite a few dollars in the previous couple of weeks. I said last week that I expect markets to look for new slightly lower ranges in the main dollar crosses and I still think this is likely. In euro dollar, for example, instead of 114 to 118, maybe we'll look for something more like 112 to 116, but this is all guesswork. I think it's also important to remember that the market is brilliant at one thing, and that is being really highly confident about an outcome, then being equally really highly confident about a totally different outcome a short while later. Case in point, earlier in the year lots of people were forecasting three Fed cuts for 2026, which seemed ridiculous to me before the war, but still conviction was high. A short time later everyone starts talking about hikes and now presumably we will start to hear about how those hikes won't happen. And the degree of certainty in all of these concepts was very high for me. The inflationary pressures are not done. It's way too early to know this, and one piece of data pointing in either direction does not change the game.

[A]

And one of the biggest winners were precious metals. With gold back to almost 4200 this morning. Is this a sustainable move, do you think?

[C]

I think the move in gold might be more sustainable. This will be the second time I refer to last week's podcast, but as for once I appear to have said some sensible things, I want to take full advantage. I mentioned the idea that speculative demand for gold overwhelmed the fundamental demand somewhere between 3,500 and 4,000. At least I think so. And therefore this was a level where it seemed more justifiable to take a positive view, even if we have admittedly looked at buying gold on dips already from higher levels than this. Naturally this observation about speculative demand had nothing to do with anticipating a weak payrolls number, but still, the idea is that a lot of the speculative longs would have been washed out already, so the environment was more positive for a rallying gold or at least some sort of building 4000 remains the key support level and there is big resistance between 4,400 and 4,500. 4,480 being where the 200 day moving average now sits, I think a healthy situation for gold would be to stabilize around the current levels. If we go flying back up above 4,500 this would make me much more nervous and actually less optimistic as people will inevitably jump on that move and recreate vulnerable positions. So let's hope for orderly moves in gold which should result in the whole precious metals complex also stabilizing.

[A]

Okay, what are the biggest opportunities that you see at the moment then following these moves?

[C]

So the dollar has softened quite a bit, but it is still reasonably strong and I would again look at those currencies where I have anyway a clearer bullish view. I suggested it last week around similar levels and I would happily take some long exposure to the Australian dollar right here. I also mentioned how weak the Canadian dollar had gotten and it still looks to me like a good level to take some exposure to the loonie oil price notwithstanding. The other commodity currencies are a little less interesting though as oil is still not really getting anywhere. I think it's too early to buy dollars, although you do get some interesting levels in dollar Swiss as we drift back towards 80. With the positive interest rate differentials in metals, I still really only want to look at gold. The others are just too volatile and hard to call. The yen has recovered somewhat against the dollar, but it's actually going nowhere in the colossus. Eurjpy is pretty sideways. I would never dream of trying to predict any central bank, but if the bank of Japan were thinking about intervention, this is a much easier market to do it in with general lease and dollar selling already taking place and lower liquidity with Independence Day weekend. As I said last week, I think that's the fifth mention now. Some sort of record. The only way I would want to position for this would be buying a put on the dollar against the yen with a limit order to take profit lowered down. I wouldn't buy yen directly, it's just too hard to call. Lastly, Helen, I went outside to tell my wife that her outfit was just not appropriate for gardening. She told me I didn't know what I was talking about. She's really digging in her heels.

[A]

Very good. Thank you very much Tim. Great to have you on the podcast as always. So that is all for today. Thank you again to my guests this morning, and thank you all for tuning in. Please subscribe to our show if you enjoy it, and you can of course also leave us a review on whichever platform you like to listen on. So we'll be back again on Monday morning. Do join us then when I will be joined by more of our colleagues to talk about what is moving markets. But until then, I wish you all a great day and then a great weekend. Bye for now.

[D]

The information and opinions expressed in this podcast constitute marketing material and are not the result of independent financial or investment research. Please refer to www.juliaspace legal podcasts for further other important legal information.