Wall Street eyes US payrolls and Broadcom as rate risks rise

Wall Street is focused on the monthly jobs report due June 5 and Broadcom’s quarterly results scheduled for Wednesday. Rising inflation and higher Treasury yields have increased the odds that the Federal Reserve will raise interest rates.

Traders expect the payrolls report to show job growth and wage trends that will influence Fed policy decisions. The Personal Consumption Expenditures price index rose 3.8% year over year through April, the largest increase since May 2023. Higher energy prices linked to the three-month Iran conflict contributed to that rise. The Fed uses the PCE index as its preferred gauge against a 2% inflation target.

Broadcom, the sixth-largest U.S. company by market value, will draw close scrutiny for revenue, profit and guidance tied to demand for AI-related chips. Since the market low on March 30, the Philadelphia Semiconductor Index has climbed about 80%, Broadcom shares have risen roughly 45% and the S&P 500 has gained about 19%.

The benchmark 10-year Treasury yield is near 4.46%, a level that raises borrowing costs for consumers and businesses and makes bonds relatively more attractive than stocks. Market participants describe rising yields as a risk for equities.

Economic reports next week will include manufacturing and services sector readings. Another inflation update the following week will be among the last major data points before the Federal Open Market Committee meeting on June 16-17, the first chaired by Kevin Warsh. Market pricing currently implies a greater likelihood of a rate increase this year than a cut, despite public calls from President Donald Trump for easier monetary policy.

The conflict in Iran remains a source of market uncertainty. Movements in oil and energy prices tied to the conflict have been a material factor in recent inflation readings. Investors will use the payrolls figures and Broadcom’s guidance to reassess demand trends, pricing power and companies’ ability to handle higher borrowing costs.