Oil Rises on Middle East Conflict Ahead of Inflation Data & SpaceX IPO

US employers added 172,000 jobs in May, more than double the roughly 80,000 economists had expected, and the surprise reset the tone across markets. Treasury yields rose, and the dollar firmed while interest rate-cut hopes faded only weeks into Kevin Warsh's term as Federal Reserve Chair. Brent crude settled just below $94 a barrel on Friday, 05 June, down about 3% on the day, though still firmer on the week, while gold fell to around $4,334 an ounce, its lowest level since March. That picture has since turned, with a weekend escalation in the Middle East pushing crude back up and Brent near $96 in early Monday trading. Three first-tier events now land inside this week:  the US May CPI and the Bank of Canada decision on Wednesday, and the SpaceX market debut pencilled in for Friday.

Here’s the week that was and the week ahead:

TL;DR

• US May payrolls rose 172,000 against expectations of near 80,000, unemployment held at 4.3%, and money markets priced out rate cuts and leaned towards a hold, with some pricing a possible hike later.

• Brent settled just below $94 a barrel and WTI near $90.30 on Friday, 05 June, then both rebounded in early Monday trading as the conflict escalated, with Brent back near $96.

• The Middle East has escalated. Over the weekend, Israel struck Hezbollah in Beirut, Iran fired missiles at Israel, and Israel struck military targets in Iran. There is still no US-Iran deal, an Iranian official has called one unfeasible for now, and the Strait of Hormuz remains nearly closed.

• The US May CPI and the Bank of Canada decision both land on Wednesday, 10 June, and China releases May inflation and trade data this week.

• SpaceX is targeting a Nasdaq debut on Friday, 12 June at a fixed $135 per share, a roughly $75 billion raise and about a $1.75 trillion valuation, which would be the largest IPO on record.

• OPEC+ approved a further 188,000 barrels per day for July, adding to supply even as geopolitical risk lingers

How Last Week Reset the Picture

The May employment report was the week's main event. Nonfarm payrolls rose 172,000, far above the roughly 80,000 expected, while March and April were both revised higher, marking the strongest three-month run in more than two years. Average hourly earnings rose 3.4% over the year. The print landed only weeks after Kevin Warsh was sworn in as Federal Reserve chair on 22 May, succeeding Jerome Powell, and ahead of his first policy meeting on 16 to 17 June. (Source: CNBC News)

With inflation already lifted by higher energy costs, the strong labour data pushed money markets to price out rate cuts and lean towards a hold, with some now pricing a possible increase later in the cycle. Higher yields weighed on rate-sensitive assets. On Friday, 05 Jun, the Nasdaq Composite fell 4.18% to 25,709.43, its worst session since April 2025, the S&P 500 declined 2.64% to 7,383.74, and the Dow Jones Industrial Average eased 1.35% to 50,866.78, with a sharp sell-off in semiconductor shares adding to the move after Broadcom left its full-year AI chip targets unchanged. Gold fell about 3% on Friday to roughly $4,334 an ounce, and silver eased about 7%, both pressured by the stronger dollar. Gold's role as a safe-haven asset came under pressure as rate-hike bets displaced the usual flight-to-quality bid.

Oil Price Volatility Continues 

Oil has shifted from the one-way supply shock of the spring to a two-way risk story. On one side, the conflict that closed much of the Strait of Hormuz keeps a supply premium in the price and leaves the market sensitive to any single headline. On the other hand, a firmer dollar and softer demand signals, led by China, pull in the opposite direction. The result is a market that could move sharply either way, which is a different setup from the steady climb that took Brent above $100 earlier in the year.

Where Oil Sits Now

Crude eased on Friday alongside the broader move. WTI settled near $90.30 a barrel and Brent just below $94, both down about 3% on the day, although Brent held a weekly gain of more than 3% after renewed clashes between US and Iranian forces earlier in the week. On the supply side, OPEC+ approved a further 188,000 barrels per day for July, and the near-closure of the Strait of Hormuz continued to restrict Persian Gulf flows. 

That move reversed over the weekend as the conflict escalated sharply. Israel struck Hezbollah targets in Beirut, Iran answered with missile barrages at central and southern Israel, its first such fire since the ceasefire, and Israel then struck military targets in western and central Iran. Israel pressed ahead even after Donald Trump urged it to hold off, and the Israeli military said the incoming missiles were intercepted with no casualties reported.

The diplomatic track has stalled with it. An Iranian official said a deal with Washington is no longer feasible at this stage, while Trump called on Tehran to return to negotiations. With the Strait of Hormuz still effectively closed, and Iran also threatening to disrupt the Bab al-Mandeb chokepoint in the Red Sea, the supply premium has reasserted itself. In early Monday trading, crude rebounded, with Brent back near $96 and WTI above $93, up about 3% after two losing sessions.

The Demand-Side Drag from China

China sits on the other side of the story. The country is the world's largest crude importer, and customs data showed April crude imports fell about 20% from a year earlier, a demand signal that has softened the supply-driven narrative. At the same time, the oil shock has fed through to factory-gate prices, with April producer prices reaching a three-year high.

This week brings fresh readings, with China's May consumer and producer price data and trade figures due, which traders may use to judge whether the oil-driven rise in producer prices is fading as crude comes off its highs. 

Bank of Canada and the Petro-Currency Channel

The Bank of Canada announces its rate decision on Wednesday, 10 June, with the statement at 09:45 Eastern Time and a press conference from Governor Tiff Macklem at 10:30. The overnight rate stands at 2.25%, and money markets place a high probability on keeping it the same, with only a small chance of a 25 basis point increase. The oil link runs in an unusual direction here. Canadian inflation has moved up on higher energy prices, reaching 2.8% in March, and the Bank has signalled that policy could move in either direction, putting a possible increase rather than a cut on the radar, even as growth stays soft.

SpaceX Targets the Largest IPO on Record

Event of the Week: SpaceX is listing on Nasdaq under the ticker SPCX. Pricing for the IPO is scheduled to be announced at the close of Thursday, 11 June, and the company's first day of trading will take place on Friday, 12 June. In an unusual move, the company set a fixed price of $135 per share ahead of marketing the deal, rather than offering a range. The Company is listing approximately 555.6m shares in the IPO, implying a valuation of approximately $1.75 trillion. That would make this the largest IPO on record by money raised, with about $75 billion sought against the roughly $29 billion Saudi Aramco raised in 2019. 

Other details from the filing include an overallotment option on a further 83.33 million shares, worth about $11.2 billion at the offer price, and Musk keeping more than 82% of the voting control, with Goldman Sachs leading. Keep in mind that the listing is a scheduled market event rather than a recommendation and that early trading in any new listing can be volatile. Anyone weighing it may want to monitor the final priced terms and the first-day reference levels. 

What Else Can Traders Watch this Week?

• US May CPI on Wednesday, 10 June, with higher energy prices expected to continue lifting prices and feed the rate debate. 

• The Bank of Canada decision on Wednesday, 10 June, and the read-through to USD/CAD.

• China's May consumer and producer price data and trade figures for demand and price pass-through signals.

• The EIA weekly petroleum status report for US inventories and any updates on Strait of Hormuz tanker traffic or fresh Gulf supply disruptions.

• The SpaceX pricing after Thursday's close and the targeted Friday listing, plus the broader tone for new issuance.

• Headlines on the US-Iran and Israel-Lebanon tracks were cross-checked against at least two major wires, given how quickly the picture has shifted.

Conclusion

A renewed escalation in the Middle East, a firm US dollar, and the largest IPO of the year add up to a volatile trading week ahead. While tracking US CPI as well as Bank of Canada data to confirm higher-for-longer rates will be traders' primary focus, the largest two-way risk event of the week will be the confluence of multiple major events that all occur roughly around the same time. And so the key two-way risks for this week include the following: will China's data show that oil demand is falling, and how will the markets receive the much-anticipated SpaceX IPO?

*Past performance does not guarantee future results. The above is for marketing and general informational purposes only, and are only projections and should not be taken as investment research, investment advice or a personal recommendation.