Before May CPI, the dollar leads and gold slides
June 9, 2026
US indices bounced on Monday, but one force runs the tape this week: the Fed. Friday's jobs report revived bets on a December rate hike, a shift that is pressuring gold, the euro and pushing the yen toward its intervention zone. Wednesday's May CPI will settle the argument.
The Fed takes back control
The US economy added 172,000 jobs in May, almost double the 85,000 consensus. That cooled hopes of easier policy fast: CME's FedWatch tool now puts the odds of a December rate hike at 72%, up from 45% a week earlier. New Fed Chair Kevin Warsh inherits a tough equation, inflation reignited by the oil shock and a labor market that refuses to slow. Ten-year yields climbed to a two-week high, which changes the math for assets that pay no coupon.
Gold and the euro take the hit
Gold paid for that repricing. The metal slid to around $4,290 an ounce, its lowest in more than two months, and it now trades below its 200-day moving average for the first time since October 2023. The currency market told the same story: the euro fell back toward $1.15, its weakest since April 6, while the dollar held firm across the G10. The yen changed hands near 160 per dollar, the level that has already drawn verbal warnings from Tokyo. Japanese officials keep repeating they stand ready to act.
Oil cools, equities breathe
The friendlier note came from the Middle East. Tehran halted its strikes on Israel and Washington flagged a new ceasefire, pulling crude back: WTI trades around $91, far from the peaks driven by fears of a Strait of Hormuz closure. That relief helped stocks. The S&P 500 closed Monday at 7,405.73 (+0.30%) and the Nasdaq Composite at 25,929.66 (+0.86%), led by a chip rebound after the index's worst session since April 2025 last week. The Dow slipped a token 0.16%.
All eyes on CPI
Everything points to Wednesday. May CPI is expected hot: Wells Fargo economists look for +0.5% on the month and inflation near 4% year over year, lifted by energy. A reading in line or higher would confirm a Fed that is stuck, maybe even hawkish, and would support the dollar. A downside surprise would hand rate-sensitive assets some breathing room. Until then caution rules, with the VIX near 21.5 and a Fear & Greed Index at 40. To track these pivots each morning, our newsletter sums up what matters before the open.
Key levels today
| Instrument | Level / Price | Change | What to watch |
|---|---|---|---|
| S&P 500 | 7,405.73 | +0.30% | Holding the bounce into CPI |
| Nasdaq Composite | 25,929.66 | +0.86% | Semiconductor leadership |
| Dow Jones | 50,786.01 | -0.16% | Rotation out of tech |
| Gold (XAU/USD) | around $4,290 | about -1% | 200-day average and $4,300 |
| EUR/USD | around 1.15 | lower | Weakest since April 6 |
| USD/JPY | around 160 | little changed | Tokyo intervention risk |
Economic agenda today
Tuesday is light: the April trade balance at 2:30 pm (Paris) and May existing home sales at 4:00 pm. The real event lands tomorrow, Wednesday, with May CPI at 2:30 pm, the week's deciding number. Thursday brings PPI and jobless claims, then Friday the University of Michigan consumer sentiment print, after a record low of 44.8 in May.
The bottom line
Indices are bouncing, but the dollar and yields set the tempo before a May CPI that is expected to run hot. Gold under pressure, the euro at lows and the yen on its red line: this session trades on nerves. Find the full market picture on our market page.
This is not investment advice. For information only.