WS #9056

The dominant signal in this window is the release of the May US jobs report, which came in at 139K vs 80K expected, triggering a Dow record high +875pts and a rotation out of AI names into cyclicals. This strong labor data reduces the probability of Fed rate cuts, with June 17 FOMC hold at 99%+. The AI trade continues to falter, with AVGO -13.4% despite beating earnings, and broad chip weakness (AMD, Arm, Micron). Lululemon's weak guidance (-10% premarket) due to social media backlash adds to consumer discretionary weakness. Geopolitical risks remain elevated: Iran fired warning shots at US destroyers in the Gulf of Oman, Germany warns against travel to Bahrain and Kuwait, and Ukrainian drone strikes hit cargo ships in Taganrog Bay and vessels in Mariupol/Berdyansk ports. The UK government revised oil price forecasts upward, assessing crude could stay around $100/bbl until 2028. SpaceX IPO preparations continue with restrictions on Chinese/HK investors. Berkshire Hathaway's proposed acquisition of Taylor Morrison signals confidence in homebuilders. The US-Iran naval confrontation is ESCALATING, while the Constanta drone incident is STABLE. The AI trade selloff is ESCALATING.