Markets Reprice for Higher U.S. Rates After Strong Payroll and Broadcom Shock

Overview

• The U.S. payroll report on Friday showed 172,000 nonfarm jobs added and unemployment steady at 4.3%, a result that surprised markets and signaled continued labor-market strength.
• After the payroll print, CME FedWatch prices shifted to roughly a 67 to 71 percent chance of at least one Fed rate increase this year, which sent Treasury yields higher and the dollar stronger.
• Broadcom’s quarterly results and below‑market chip-sales guidance triggered heavy selling across semiconductor and AI-related stocks, driving steep losses in names such as Arm, Marvell, Micron, Intel and Broadcom and plunging the Nasdaq.
• The repricing of U.S. monetary policy spilled into emerging markets: the dollar climbed to about R$5.11–R$5.16, the Ibovespa fell and Brazilian futures yields rose, reducing the near‑term odds of further Selic cuts ahead of the June 17 decision.
• Geopolitical developments in the Middle East briefly eased oil prices when a U.S.-mediated Israel–Lebanon ceasefire was reported, but the deal looked fragile, and investors are now focused on next week’s U.S. CPI print for further guidance on inflation and Fed action.