Date: 29th June 2026.
NASDAQ Rises as South Korea Unveils Major AI Chip Investment.
Investors are now turning their attention to the upcoming NFP data which continues to look increasingly positive. Markets expect the NFP to read 115,000, the unemployment rate to remain the same and for earnings to increase 0.3%.
In addition to this, the markets expect the JOLTS Job Openings to continue to remain above 7.0 million. The employment picture remains resilient and likely to support an interest rate adjustment. However, why is the US Dollar Index declining and stocks increasing under a hawkish policy outlook on Monday?
US Dollar: Why Is The Dollar Retracing Under Hawkish Fed
The US Dollar Index has been retracing this morning and on Friday, however, traders should note the currency remains relatively strong. When monitoring the US Dollar Index’s 52 week range, the currency is trading exceptionally high. In addition to this, the currency index continues to maintain bullish indications on the medium and longer-term timeframes.
One of the reasons that the US Dollar has lost momentum is that the possibilities of a rate hike for July have decreased. 30% of market participants now expect the Fed to adjust its federal fund rate. This is down from 36% a week ago, however, 41% of analysts continue to expect two or more rate hikes by the end of the year. So market expectations for rate hikes remain but are weakening at the moment. For this reason, the US Dollar Index is retracing.
Though traders should note that if this week’s employment data reads stronger than expected, the bullish momentum may quickly return. The key data which investors will be monitoring is the JOLTS Job Data, ADP NFP Change and the Non-Farm Employment Change. Analysts expect the NFP figure to read 115,000, which remains above the 6-month average (93,000).
If the employment figures read higher, markets will turn more hawkish on the upcoming Federal Reserve rate decisions.
Currency Market: Dollar & Yen Down
The best performing currencies of the day’s Asian Session are the New Zealand Dollar, Euro and the Great British Pound. The worst performing currencies are the Japanese Yen and the US Dollar. The USD and the JPY continue to decline as we approach the European opening trade, and the CAD and CHF are witnessing up and down movement. All other major currencies are increasing as we approach the open.
Lastly, Bitcoin is also increasing in value on Monday morning and so far is maintaining bullish momentum.
NASDAQ: South Korea set to Invest $518 Billion on Chip Manufacturing
The NASDAQ, which came under pressure last week, is losing downward momentum and is the best performing index of the day. The NASDAQ is also outperforming the NIKKEI 225, despite the asian session already taking place. In addition to this, all global indices are trading higher while the VIX falls 1.10%. For this reason, the market seems to be taking a “risk-on” appetite so far.
HFM - NASDAQ 15-Minute Chart
One of the reasons the index is rising is due to the earnings season for the 2nd quarter getting close. For the technology sector, earnings season will gain momentum on July 22nd, while the general stock market will see higher volatility from the 14th onwards.
Another reason for the improved sentiment is South Korea’s announcement regarding chips and AI. South Korea has announced a major AI and semiconductor investment drive worth more than $518 billion, backed by Samsung Electronics, SK Hynix and other suppliers. President Lee Jae Myung aims to use the initiative to strengthen the country’s position in the global AI-chip race. The plan focuses on expanding chip production, boosting high-bandwidth memory and DRAM capacity, and developing new semiconductor hubs outside the Seoul area to support regional growth.
The main risk for bullish traders remains the Federal Reserve and hawkish rate adjustments. Analysts are advising the NASDAQ is the index which will be hit most by rate hikes due to its exposure to growth stocks.
If oil prices rise in the upcoming days, interest rate concerns could grow. Tensions again rose over the weekend in the Middle East but oil prices are yet to react. Oil prices remain in and around $70 per barrel. If oil prices rise, sentiment can fall, particularly if employment data reads higher than expectations.
Key Takeaways:
Markets expect NFP to reach 115,000, remaining above the 6-month average and supporting labour resilience. The unemployment rate is expected to stay unchanged, while average earnings are forecast to rise 0.3%.
JOLTS job openings are expected to remain above 7.0 million, reinforcing the resilient US employment picture.
The Dollar is retracing as July rate hike expectations weaken, despite longer-term bullish indications remaining intact.
Stronger employment data this week could quickly revive Dollar strength and increase hawkish Fed expectations.
NASDAQ is leading global indices higher as risk appetite improves and Q2 earnings season approaches.
South Korea’s massive AI chip investment is boosting technology sentiment and supporting NASDAQ’s stronger performance.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HFM Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Michalis Efthymiou
HFMarkets
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.