Wall Street limps into the new week on its back foot.

The S&P 500 fell 2.6% on Friday, June 5, to close at 7,383.74, while the Nasdaq Composite tumbled 4.2% to 25,709.43 — its steepest one-day drop since April 2025. The Dow Jones Industrial Average lost 695 points, or 1.4%, finishing at 50,866.78. It was the S&P 500’s first losing week in 10, capped by a chip-driven rout that erased more than $1 trillion in market value.

The trigger was a hotter-than-expected jobs report. The U.S. economy added 172,000 jobs in May, more than double the 80,000 economists had penciled in, and the unemployment rate held at 4.3%, the Bureau of Labor Statistics said. “Average hourly earnings rose 0.3% for the month and were up 3.4% over the past year,” according to the BLS release — wage growth firm enough to keep the Federal Reserve on alert.

A resilient labor market is normally good news. This time it rattled traders, because it all but erased hopes of near-term rate cuts and pushed the 10-year Treasury yield to 4.55%.

The inflation test: May CPI on Wednesday

The week’s marquee event lands Wednesday, June 10, when the BLS releases the May Consumer Price Index. Economists expect core CPI — which strips out food and energy — to rise 0.2% from April and 2.8% from a year earlier, a cooler monthly pace than April’s 0.4% jump.

The print matters more than usual. With the labor market still hot, inflation is now the variable that decides the Fed’s next move. A soft number would calm rate-hike fears; an upside surprise would reinforce them. Producer prices follow Thursday, June 11, offering a second read on pipeline costs.

A Fed that may hike, not cut

For most of the past year, the debate was about when the Fed would lower borrowing costs. That script has flipped. The federal funds rate sits at 3.50%–3.75%, and futures markets now price meaningful odds of at least one rate hike before year-end rather than a cut.

New Fed Chair Kevin Warsh, who once argued that AI-driven productivity could give the Fed room to ease, now faces a committee in no mood to cut while interest rates climb across the curve. The FOMC meets June 16–17, with Warsh’s first post-meeting press conference set for June 17 — making this week’s CPI the last major data point before that decision.

Earnings and the ECB

Corporate results slow but don’t stop. Oracle (ORCL) and Chewy (CHWY) report Wednesday, June 10, followed by Adobe (ADBE) and homebuilder Lennar (LEN) on Thursday, June 11. Campbell’s (CPB) opens the week Monday, with J.M. Smucker (SJM) and Casey’s General Stores (CASY) due Tuesday — a consumer-heavy slate that offers a window into how households are absorbing higher prices. Across the Atlantic, the European Central Bank announces its own rate decision Thursday, June 11.

What to watch this week

  • Wednesday, June 10: May CPI, the week’s key release, plus earnings from Oracle and Chewy.
  • Thursday, June 11: May PPI, the ECB rate decision, and results from Adobe and Lennar.
  • Friday, June 12: the University of Michigan’s preliminary June consumer sentiment, after May’s reading slumped to a record-low 44.8.
  • The 10-year Treasury yield: a sustained move above 4.6% would pressure rate-sensitive tech further.
  • Semiconductors: watch whether Nvidia and the broader chip complex stabilize or extend Friday’s slide.

The takeaway for investors is straightforward: this is a data-driven week, and Wednesday’s inflation number will set the tone heading into the Fed’s June 17 decision.