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U.S. nonfarm payrolls rose by 172,000 in May, well above the average Wall Street estimate of 80,000, while the unemployment rate held steady at 4.3%, the government said Friday. In addition, April payrolls were revised to show a rise of 179,000, up from an initial estimate of 115,000. March was revised to show 214,000 new jobs were created versus an initial estimate of 185,000. The data points to a jobs market springing back after a soft patch late last year, despite concerns about the Iran war. It also serves to ensure the Federal Reserve won’t be contemplating a resumption of rate cuts and may begin debating the case for an eventual rate hike. Fed funds futures traders on Friday morning priced in a nearly 70% probability of at least one quarter-point rate hike by year-end.
Those rate concerns led to a jump in Treasury yields. The yield on the 2-year note rose to 4.16% – its highest since February 2025. The U.S. dollar strengthened and the stock market suffered a steep selloff, with the S&P 500 dropping 2.6% and ending a streak of nine straight weekly gains. The tech-heavy – and rate-sensitive – Nasdaq Composite slumped 4.2% and the Dow Jones Industrial Average shed 695.15 points, or 1.3%.
A stronger dollar and higher Treasury yields were no help to commodities. A firmer dollar tends to be a negative, making commodities more expensive to users of other currencies. Rising yields can make bonds more attractive relative to nonyielding assets. Throw in a general risk-off tone and it was no surprise to see July corn slumping to a new contract low, July soybeans notching a four-month low and wheat extending its recent decline.
Texas governor wants to speed sterile fly facility: Texas Gov. Greg Abbott expressed concern Friday that a new factory isn’t slated to start breeding sterile New World screwworm flies for more than a year as a big part of the effort to stop its flesh-eating larvae from threatening the $113 U.S. billion cattle industry, the Associated Press reported. Abbott said Texas will help USDA accelerate construction of the $750 million breeding facility outside Edinburg, Texas, about 20 miles north of the U.S.-Mexico border. He said Texas is willing to spend its own funds to see that construction is “24 hours a day, seven days a week.”
- Without greater sterile fly production, Abbott said during a news conference in the state capital of Austin, “We cannot make it through a second summer.”
USDA on Wednesday confirmed a screwfly case involving a three-week old calf near La Pryor, Texas, earlier this week. Cattle markets had sold off as fears of a U.S. case had mounted, but rallied back sharply after Wednesday night’s confirmation.
August live cattle futures hit a two-week high early in Friday’s session and ended with a weekly gain of $2.60. August feeder cattle futures finished with a weekly gain of $5.475 after posting a limit gain of $10.75 in Thursday’s session.
Treasury crackdown on unlawful workers: The Treasury Department on Friday urged U.S. banks to detect and report identity theft, payroll fraud and other illicit activities tied to people not authorized to work in the United States, Reuters reported. The message follows President Donald Trump’s executive order last month directing financial institutions to increase their scrutiny of non-citizens’ banking activities.
Gold displaces bonds: Gold has dethroned U.S. government bonds as the world’s top reserve asset following years of relentless buying by central banks and a historic rally that has seen prices nearly double over the past two years, the Financial Times reported, citing a report from the European Central Bank. Bullion accounted for 27% of all global central bank reserve assets at the end of 2025, up from 20% a year earlier. U.S. Treasuries fell to 22 per cent from 25 per cent over the same period, while the share of euro-denominated reserve assets was unchanged at 15%.
Indonesia issues commodity exports regs: Commodity powerhouse Indonesia issued a regulation on Friday to bring exports of its strategic commodities under central government control, a move aimed at boosting state earnings and stabilising its rupiah currency, Reuters reported.President Prabowo Subianto announced on May 20 that Indonesia would bring exports of all of its strategic commodities under the control of a new state company, a move that has spooked investors.
Under the regulation, palm oil, coal, and ferroalloys can only be exported by a state-owned enterprise, either as “the owner or sole mediator”, the report said. “In the export of strategic natural resource commodities by the state-owned export enterprise ... the selling price shall be determined by the state-owned export enterprise,” according to the regulation, which adds that the enterprise can also set margins. Ministers will decide later whether to extend the regulation to more strategic commodities later, the report said.
Trade flows resilient: The closure of the Strait of Hormuz is creating a major supply shock when it comes to oil, fertilizer and other items, but global flows of goods across borders continue to show resilience, according to a leading indicator compiled by the World Trade Organization. The WTO, a Geneva-based body that mediates trade disputes, on Friday said its Trade Barometer fell to 101.7 in June from 102.3 in January, the Wall Street Journal reported. A reading above 100 indicates exports and imports are rising at a faster pace than the average rate recorded over recent decades.The slight decline indicates that while the pace of trade growth is expected to moderate over coming months, it is set to remain above the average rate recorded over recent decades, the report said.
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