(The opinions expressed here are those of the author, a

columnist for Reuters.)

By Mike Dolan

July 2 (Reuters) -

What matters in U.S. and global markets today

By Mike Dolan, Editor-at-Large, Finance and Markets

The U.S. jobs report will clearly dominate the day ahead for

markets, but there's been a hefty pullback in red-hot chip

stocks around the world as the second half of the year gets

underway.

Given the shortened week, quarter-end trading quirks and the

looming payrolls report, it may be unwise to read too much into

this week's market moves, but it does appear there's some degree

of profit-taking and portfolio shuffling going on.

I'll get into that and more below.

But first, check out my latest column on the U.S. economy's

seemingly unstoppable expansion over the past 17 years and what

it's meant for the equity bull market.

And listen to the latest episode of the Morning Bid daily

podcast, where I dig into June's expected job numbers. Subscribe

to hear Reuters journalists discuss the biggest news in markets

and finance seven days a week.

Finally, Morning Bid Weekend will be off tomorrow for the

Independence Day holiday.

CHURNING CHIPS

The U.S. SOX chip index fell back about 6% on Wednesday with no

obvious trigger, even though the wider S&P 500 ended flat and

the equal-weighted index hit new highs. Asia stocks took their

lead from the SOX today, with sizeable declines in big chip and

tech equipment makers in Seoul and Tokyo.

Meta, which had lost about 15% in the first half of the year,

was an outlier stateside, rising nearly 9% on Wednesday on a

report that it was building out its cloud business and planned

to sell excess AI computing capacity.

Also on the tech front, the FT reported on Thursday that OpenAI

would offer the U.S. government a 5% stake.

Meantime, today's payrolls report is expected to show another

brisk gain of 110,000 jobs last month - well above the so-called

breakeven rate needed to keep the unemployment rate steady.

There was a slight miss in ADP's private sector jobs report on

Wednesday, but not enough to shift any Federal Reserve

expectations.

Fed Chair Kevin Warsh was equivocal in his take on things in

Portugal on Wednesday, insisting the central bank was committed

to getting inflation back to 2% but noting there had been

improvement in the inflation picture in recent weeks.

Although Fed futures still see a rate hike by October, crude oil

prices continue to decline amid more positive noises about talks

between U.S. and Iranian officials this week. Brent crude was

trading at around $71 per barrel early on Thursday.

And in Europe there was good news on the inflation front on

Wednesday, as euro zone headline CPI came in at 2.8%, well below

expectations for 3%. That offers some hope that the ECB can

avoid further rate hikes now that energy prices are retreating.

Elsewhere, the yen jumped sharply from Wednesday's 40-year low,

as nerves about possible Bank of Japan intervention to support

it jangled.

Reuters reported that Japan's authorities are looking to adopt a

more opportunistic currency intervention strategy, aimed at

ambushing speculative bets rather than telegraphing plans in

advance or drawing lines in the sand.

Chart of the day

If AI is going to destroy job creation, it's not happening yet.

The U.S. economy posted a third straight month of strong job

gains in May and another 100,000 or more are expected to be

recorded for June when the monthly employment report is released

later on Thursday.

Employment gains have averaged 188,000 jobs per month over

the past three months, nearly triple the comparable figure for

the same period in 2025, and about 150,000 more than most

estimates of the so-called breakeven rate that keeps the

unemployment rate steady.

Today's events to watch

* U.S. June nonfarm payrolls (8:30 a.m. EDT), weekly jobless

claims (8:30 a.m. EDT), May factory orders (10 a.m. EDT)

* San Francisco Fed's Mary Daly speaks

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Opinions expressed are those of the author. They do not reflect

the views of Reuters News, which, under the Trust Principles, is

committed to integrity, independence, and freedom from bias.