- U.S. stocks outperformed crypto this week. The S&P 500 was almost unchanged, while the Nasdaq, Dow, and Russell 2000 all ended the week higher.
- Crypto had a tougher week, with Bitcoin and Ethereum both dropping by double digits as ETF outflows and leveraged liquidations picked up speed.
- The broader economic outlook is still mixed. Softer labor data suggests the Fed could ease policy eventually, but persistent inflation is stopping them from shifting to a more supportive stance.
- AI and semiconductor stocks continued to do well, showing that investors still want to invest in infrastructure growth, even when the market is more volatile.
- The IPO pipeline is getting more attention, as companies like Anthropic, OpenAI, and SpaceX bring up questions about liquidity, valuations, and whether public markets are ready for these large private AI firms.
- RWA and tokenized Treasuries slowed down a bit, but higher yields are still making on-chain cash and collateral products attractive.
This week’s market showed a sharper split between traditional risk assets and crypto. U.S. stocks stayed strong, volatility dropped, and semiconductor stocks kept gaining from the AI infrastructure narrative. Crypto moved in the opposite direction, with Bitcoin and Ethereum dropping sharply as ETF outflows increased and leveraged positions were closed out (Yahoo Finance chart data, Yahoo Finance Bitcoin chart data, CoinStats).
The main story is how investors are choosing where to put their money. They are still backing long-term growth in AI, semiconductors, tokenized finance, and upcoming IPOs. However, persistent inflation, higher interest rates, and weaker crypto ETF flows are making investors more careful about which growth areas get new funding (NVIDIA, RWA.xyz, Fox Business, Yahoo Finance).
Market snapshot: equities were steady, crypto broke lower
From the start of the week to June 4, the S&P 500 was almost unchanged at +0.15%. The Nasdaq 100 rose 0.78%, the Dow was up 0.73%, and the Russell 2000 gained 1.31% (Yahoo Finance chart data, Yahoo Finance Nasdaq 100 chart data). The VIX dropped 3.34%, while the 10-year Treasury yield stayed around 4.47% and the 30-year yield was just under 5.0%. This means the stock rally was not due to lower interest rates (Yahoo Finance VIX chart data, Yahoo Finance Treasury yield chart data).
Crypto was much weaker. Bitcoin fell 13.98% from May 31 through the latest available June 4 data, while Ethereum dropped 12.43%, turning what had been a controlled consolidation into a more meaningful liquidity event (Yahoo Finance Bitcoin chart data, Yahoo Finance Ethereum chart data). CoinStats reported that BTC traded near $64,024 and ETH near $1,789 on June 4, with more than $200 billion erased from total crypto market capitalization over 24 hours (CoinStats).
The takeaway is clear: stocks are still supported by earnings, AI investment, and lower volatility, while crypto is more affected by money leaving the market. This difference is important because Bitcoin and Ethereum are now trading more like big institutional assets, not just as part of the crypto world.
Macro: Softer labor data helps the Fed, but high inflation still limits relief
The macro backdrop became more complicated this week. ADP reported that private employers added only 3,000 jobs in May, with gains concentrated in education and health services, trade and transportation, and professional services (ADP). That softer labor signal would normally help risk assets because it reduces pressure on the Fed to stay restrictive.
The challenge is that inflation is still too high for the Fed to shift to a more supportive stance. The April PCE report showed the price index up 0.4% for the month and 3.8% for the year, while core PCE rose 0.2% monthly and 3.3% yearly (BEA). Personal spending increased by 0.5%, but the saving rate dropped to 2.6%, meaning people are still spending but have less of a financial buffer (BEA).
The Fed minutes reinforce that tension. A majority of participants said some policy firming could be appropriate if inflation remains persistently above 2%, while several officials opposed language implying an easing bias (Federal Reserve minutes). That means markets can rally on weaker labor data, but they cannot yet rely on the Fed to provide a broad liquidity tailwind.
Crypto: ETF outflows turned into a deleveraging cycle
The main crypto story this week was a sharp drop in ETF demand. Yahoo Finance reported that U.S. spot Bitcoin and Ether ETFs had $609.3 million in net outflows in one session, with $519.1 million from Bitcoin ETFs and $90.2 million from Ether ETFs (Yahoo Finance). During this time, Bitcoin traded near $65,700 and Ether dropped below $1,900 (Yahoo Finance).
CoinStats showed an even bigger move on June 3, with $396.6 million leaving spot Bitcoin ETFs, $53.0 million in Ethereum ETF redemptions, and about $1.75 to $1.84 billion in crypto derivatives liquidated in 24 hours (CoinStats). Bitcoin open interest fell 22% to $48.43 billion, and Ethereum open interest also dropped 22% to $26.59 billion, suggesting this was more about forced position resets than just spot selling (CoinStats).
This matters for more than just the price drop. ETF outflows mean less institutional buying, and lower open interest shows that leverage is being cleared out. While this could set up a healthier market later, in the short term it makes any rallies less likely to last until ETF flows settle down.
AI and semiconductors: Investors still want exposure to infrastructure
AI stocks stayed strong this week. NVIDIA rose 2.11% from the start of the week to June 4, and the VanEck Semiconductor ETF was up 6.15%. This shows that semiconductor stocks kept attracting investment, even as the broader market was more volatile (Yahoo Finance NVIDIA chart data).
This strength comes from NVIDIA’s latest earnings, which continue to support the AI infrastructure story. NVIDIA reported Q1 FY2027 revenue of $81.6 billion, up 85% from last year, with record Data Center revenue of $75.2 billion and Q2 guidance of $91.0 billion, give or take 2% (NVIDIA). These numbers keep the AI investment story going, even as investors pay more attention to valuations and interest rates.
The question now isn’t about whether there is demand for AI. It’s about whether public markets will keep supporting AI infrastructure, especially with high interest rates and new AI IPOs competing for investment.
IPO pipeline: The next liquidity test goes beyond SpaceX
The IPO pipeline is now a bigger market theme, not just about one company. Anthropic said it confidentially filed for a U.S. IPO after raising $65 billion at a $965 billion valuation in late May (Fox Business). The same report said SpaceX is expected to start its roadshow on June 4, aiming to raise about $75 billion at a $1.75 trillion valuation, and OpenAI may list as early as September with a possible $1 trillion valuation.
This is important because public markets may soon need to handle several large private companies going public at once. If there is strong demand, this IPO wave could boost the AI and innovation trade by letting investors buy into leading AI, space, and computing companies. If demand is weak, it could lead to a wider rethink of private company valuations and long-term growth investments.
The main issue isn’t just about liquidity, but about how valuations shift. These companies were valued in private markets during a period of strong AI excitement, and now public investors will have to decide if those prices still make sense with higher rates and more market volatility.
RWA: Tokenized Treasuries are still useful, but growth has slowed
Tokenized Treasuries stayed one of the more stable crypto themes for institutions, but growth slowed down. RWA.xyz reported $14.72 billion in tokenized Treasury value as of June 4, down 2.24% over the past 30 days, with a 7-day APY of 3.37% (RWA.xyz). Circle, Ondo, Franklin Templeton, and Securitize are still the biggest platforms by value (RWA.xyz).
This is important because RWA is still supported by the same factor that is hurting crypto prices: high Treasury yields. Higher rates make tokenized Treasury products appealing for on-chain cash and collateral, but they also make people less interested in riskier crypto investments. This creates a divide in digital assets, where regulated, yield-bearing products remain popular even as tokens and ETFs see outflows.
Bottom line
This week was defined by divergence. Equities held up, semis remained strong, and the IPO pipeline continued to expand, but crypto suffered a clear ETF-led deleveraging cycle.
The market isn’t giving up on growth, but it is getting more selective about where to invest, focusing on liquidity, valuations, and real demand. What happens next will likely depend on three things: if Friday’s jobs data shows continued labor weakness, if Bitcoin ETF outflows slow down, and if public demand for new AI and space IPOs stays strong enough to handle the extra supply.
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