STRAIGHT FROM THE TRADING FLOOR
by Eric Criscuolo - Market Strategist
Published on 6/03/26 (a/o 2:00 pm)
DOW 50,881 (-427), S&P 500 7,567 (-43), Russell 2000 2,898 (-34), NYSE FANG+ 10,227 (+16), ICE Brent Crude $97.93/barrel (+$1.93), Gold $4,466/oz (-$54), Bitcoin ~65.7k (-1786)
- Who invited tariffs back to the headlines?
- Hostilities flare up in the Middle East
- Equites lower; yields, oil higher
- Go Knicks!
- Check out some of the recent ICE Data/Content:
- Inside the ICE House
- Episode 537: Fundrise CEO Ben Miller on Democratizing Private Markets, AI, and VC Investing
- ETF Central: FLX Networks Founder and CEO Brian Moran
- NYSE Research Insights: Behind the Record Volumes: A Hidden Opportunity
- ICE Mortgage Monitor: Delinquencies Hold Steady in April
- Market Story Lines
MAC Desk Commentary:
Yesterday the S&P 500 ran its daily winning streak to nine. Gains were modest but a win is a win and the index closed above 7,600 for the first time. Small and midcap indices outperformed ending up closer to 1% after underperforming in the prior session. Tech was mixed with semiconductors and other AI hardware/infrastructure stocks trading well. A big Alphabet capital raise supported the AI ecosystem. Software was under pressure though and gave back a lot of the previous session’s sharp gains, when AI Pope Jensen blessed the sector and exorcised the AI-disruption demon. Crypto made headlines after Bitcoin broke below $70k as sentiment continued to deteriorate. The complex was also still dealing with the existential shock of OG HODL’er Michael Saylor’s Strategy selling Bitcoin the other day, albeit a tiny amount.
S&P futures traded around unchanged overnight after recovering from a quick bout of selling on news of Iranian attacks across multiple Middle East targets including a large strike on Kuwait’s international airport. The index opened slightly lower but quickly fell to its lows (-0.6%). Aside from the overnight attacks, part of that weakness could be the Trump administration’s proposed “forced labor tariffs” of at least 10% on 60 nations that would partially fill in the hole left by the Supreme Court striking down IEEPA tariffs in February. The tariffs would be placed on countries that haven’t effectively banned imports made with forced labor, and were a part of investigations announced by the USTR after the IEEPA ruling. A related investigation into countries’ excess manufacturing capacity is still to come. While the tariffs were not necessarily out of the blue, they could reignite trade uncertainty at a time when supply chains are already reeling from the Iran war.
The S&P is down ~0.5% while the equal-weight is also lower but slightly outperforming. Small caps are underperforming with yields and oil higher. The nervous energy is understandable as we’re only a few hours away from Tip-Off for the Knicks in Game 1 of the NBA Finals.
Energy is the leading sector, following the commodity higher. The defensive Staples are also outperforming, as is Healthcare and Real Estate despite the rise in yields. Tech and Discretionary are the laggards along with Financials (asset managers, crypto names, Private Equity/Credit). For tech, software is undoing its week-to-date gain, and cooling off from its move into very overbought conditions. Semis are strong however (ICE Semis >1%) but mega-cap tech is lower overall (NYSE 100 -1%) with MSFT, NVDA and AMZN down ~3% each. META is an outlier to the upside after announcing an enterprise AI agent for WhatsApp.
Among earnings reporters, cybersecurity provider Palo Alto is down >5% despite a strong report and earnings beat. CrowdStrike reports tonight, along with Broadcom. Gitlab is lower as well on a beat-and- raise, as is Macy’s. Medtronic is providing good news to the beaten up Med Device group, trading up 5%.
Yields are up ~5bp across the curve on the geopolitical flare ups. NY Fed President Williams said “I don’t see any need to raise or lower interest rates right now.” Treasury Secretary Bessent was in front of Congress. Among his many comments, he said we have a spending a growth problem but there’ s chance of a sub-4% deficit-to-GDP ratio by the end of Trump’s term. It’s about 6% currently. The US Dollar Index is up and back to 99.5.
- US 2yr +4bps to 4.08%, 5yr +5bps to 4.21%, 10yr +5bps to 4.49%, 30yr +4bps to 4.99%
- USD index: +$0.33 to $99.51
The ISM Services PMI improved from last month and was better than expected. New Orders rose and Prices saw a modest increase as well. Employment, however remains in contraction (<50). This follows the solid ISM Manufacturing report on Monday. Flagged commentary was more circumspect, however, focusing on rising prices. Two of the more interesting:
"Suppliers across numerous industries are trying to pass price increases for fuel surcharges and increased input costs for resin-based products and the like. This is the definition of inflationary pressure starting to affect us. We expect significant cost increases to impact us by late second quarter (Q2) and definitely in Q3.” (Accommodation & Food Services)
“Capital expenditure energy projects continue to be delayed or revamped based on macroeconomic factors. Data center power generation projects are driving demand and reducing available inventory across the piping market.” (Wholesale Trade).
The ADP Employment came in strong showing 122k jobs added to the economy with Chief Economist Nela Richardson saying, “Hiring was more broad-based in May than we’ve seen in the last few years.”
There have been some press reports about incoming Fed Chair Warsh. He sent a memo promising to review Fed strategies and hired conservative analysts Paul Winfree, who authored the Project 2025 blueprint, and Daniel Heil to assist with this. Separately there are reports he could look to remove forward guidance, though the Statement is already expected to be adjusted to a more neutral stance. A Reuters story even suggests he might not submit a DOT in the SEP (oh no!).
Economic activity increased at a slight to moderate pace for 10/12 Federal Reserve Districts according to this afternoon’s Fed’s Beige Book release. That’s a little better than the 8/12 showing in the last update. The report also showed rising stress for consumers from ever-higher prices.
The full monthly manufacturing orders report lined up with the advanced report last week, including the big jump in aircraft orders and rare decline in ex-defense/ex-aircraft orders. Other notable gains included gas field machinery (+29%), Industrial machinery (+7%) and electrical equipment (+3%).
Markets in Asia were mixed overnight while European indices ended lower. The Nikkei was the standout closing up 2.5% at a new all-time high, driven by continued strength in the tech sector, though speculation of a rate hike in June is growing.
In China markets were mixed with the Hang Seng falling >1% giving back some of the week’s gains while Shanghai ended slightly higher. RatingDog Services PMI came in ahead of expectations. India’s final Services PMI was revised higher (to a six-month high) but the Sensex closed modestly lower. Meanwhile the only thing that could keep South Korea’s Kospi from going higher was closing it for a holiday.
European indices generally finished around their lows and were under pressure from the jump as oil and gas moved higher on Iranian hostilities and the return of tariffs to the headlines. There’s also growing talk of a more confrontational relationship with China. On the positive side, Services PMIs across the region were revised higher.
Crude is up ~2% with Brent moving back above its 50d ma and looking at three straight days of gains this week. Natural gas is higher as well. Metals are lower across the group. Gold is down about 1% but outperforming others (silver, copper -2%, platinum/palladium -4%). Copper saw some volatility after US announced modifications to current tariff rules on the metal as well as steel and aluminum, starting June 8. The crypto majors continue to face sustained pressure. Bitcoin is down ~2% and approaching $65k while ETH failed to hold $2k and is sliding toward $1800.
Earnings:
- After-Market: AI, AVGO, CHPT, CRWD, DSGX, FIVE, NTSK, PVH, TLYS, VEEV, WOOF
- Pre-Market (Thrs): BF.B, CAL, CIEN, TTC
- After-Market (Thrs): AGX, CURV, DOCU, GWRE, IOT, LULU, NX, PL, RBRK, TTAN
Economic Data:
US:
- Mortgage Apps: -2.9% vs prior -0.4%
- Refis: -2.3% vs prior -18.1%
- 30yr Rate: 6.57% prior 6.65%
- ADP Employment Change: 122k vs. 117k cons., prior 109k
- Final Services PMI: 50.7 vs flash 50.9
- ISM Services: 54.5 vs 53.8 cons, prior 53.6
- Factory Orders m.m: 4.8% vs 4.6% cons, prior 1.8%
- Ex-transports: 1.3% vs prior 1.8%
- EIA Oil Inventories: -7.974M vs -4.0M cons, prior -3.327M
- API inventories (Wed AMC): -6.75M vs -3.6M cons, prior -2.8M
- 4:00pm Fed Logan
Global:
- China Rating Dog Services: 54.0 prior 53.1
- Japan Services PMI (final): 50 prior 50
- India Services PMI (final): 59.3 prior 58.1
- EU PPI: 0.6% vs. 0.4% cons, prior 3.4%
- EU Services PMI (final): 48.5 prior 47.5
- Germany Services PMI (final): 48.1 prior 47.8
STRAIGHT FROM THE TRADING FLOOR
by Michael P. Reinking, CFA - Sr. Market Strategist
Published on 6/03/26 (a/o 9:00 am)
Good morning,
The countdown is to tipoff is on! The Knicks have been on an amazing run winning 11 straight games heading into the NBA finals. Speaking of amazing runs, coming into today’s session the S&P 500 is riding a nine-day and nine-week winning streak. Yesterday’s gains in the index were modest gaining only ~0.1% but closing above 7,600 for the first time. Small and midcap indices outperformed ending up closer to 1% after underperforming in the prior session. Tech was mixed with semiconductors and other AI hardware/infrastructure stocks trading well after the Alphabet capital raise though software was under pressure giving back much of the previous sessions gains after AI pope Jensen blessed the sector. The other big story during the day were the sharp declines across the crypto complex with Bitcoin breaking below 70k as sentiment continued to deteriorate. Earlier this week the OG HODL’er, Michael Saylor, sold a tiny amount of Bitcoin to fund dividend payments and prices are now below Strategy’s cost basis ~75k.
Futures have been drifting lower overnight and have started to accelerate to the downside as we approach the open. Oil prices and yields are moving higher as the US/Iran continue to exchange fire and there have been no breakthroughs in negotiations. The White House proposed new tariffs of between 10% - 12.5%, to replace the 10% temporary tariffs that were put in place after the IEEPA tariffs were struck down by the Supreme Court. This will be levied against 60 countries including China, the EU, Japan and India. Private credit headlines are back as well after another round of redemption requests were capped at Partners Group and Cliffwater. Futures are near session lows with the S&P down ~0.25% and the R2K off ~0.6%.
This morning the ADP Employment came in strong showing 122k jobs added to the economy with Chief Economist Nela Richardson saying, “Hiring was more broad-based in may than we’ve seen in the last few years.” The distribution of jobs happened across small/medium and large businesses. The only two sectors that saw declines were natural resources and mining (-3k) and information services (-7k). Healthcare and education accounted for nearly half the gains while trade, transportation and utilities added another 36k. Pay for job stayers was flat at 4.4% while job changers moderated to 6.5% from 6.6%. There have been some press reports about incoming Fed Chair Warsh. He sent a memo promising to review Fed strategies and hired conservative analysts Paul Winfree, who authored the Project 2025 blueprint, and Daniel Heil to assist with this. Separately there are reports he could look to remove forward guidance though the statement is already expected to be adjusted to a more neutral stance. A Reuters story even suggests he might not submit a DOT in the SEP (oh no!). Yields have been moving higher they did extend to the upside after the ADP report but have given back most of that leg currently up 3-5bps with some flattening of the curve. The USD index is also moving higher. After the open final services PMIs will be released followed by ISM Services at 10:00. The Beige Book will also be released this afternoon.
Government Yields
Markets in Asia were mixed overnight while European indices are under some pressure. The Nikkei was the standout closing up 2.55 at a new all-time high driven by continued strength in the tech sector. Speculation of a rate hike in June are growing louder. The only thing that could keep the Kospi from going higher was closing it for a holiday. In China markets were mixed with the Hang Seng falling >1% giving back some of the week’s gains while the Shanghai Comp ended slightly higher. Rating Dog Services PMI came in ahead of expectations. In India there was a positive revision to final services PMI which hit a six-month high however, the Sensex closed modestly lower amidst the continued geopolitical uncertainty. European indices have also been under pressure. Final Services PMIs were revised higher across the region.
Oil prices have been moving higher overnight but have just started to pullback over the last 30 minutes currently up ~1.5%. Metals have been under pressure overnight down ~1%. Ag is moving slightly higher. Crypto continues to be under pressure. According to Coindesk - Visa, Mastercard and Strip will soon introduce a new stablecoin platform.
Palo Alto was the big earnings overnight and the company had strong results but is pulling back modestly after the recent strength, CrowdStrike reports this evening. Elsewhere within software CGNT is moving sharply lower after earnings. The big report after the close is Broadcom.
Earnings:
After-Market: GTLB, PANW, ULTA
Pre-Market: CXM, M, MDT
After-Market: AI, AVGO, CHPT, CRWD, DSGX, FIVE, NTSK, PVH, TLYS, VEEV, WOOF
Economic Data:
US:
The countdown is to tipoff is on! The Knicks have been on an amazing run winning 11 straight games heading into the NBA finals. Speaking of amazing runs, coming into today’s session the S&P 500 is riding a nine-day and nine-week winning streak. Yesterday’s gains in the index were modest gaining only ~0.1% but closing above 7,600 for the first time. Small and midcap indices outperformed ending up closer to 1% after underperforming in the prior session. Tech was mixed with semiconductors and other AI hardware/infrastructure stocks trading well after the Alphabet capital raise though software was under pressure giving back much of the previous sessions gains after AI pope Jensen blessed the sector. The other big story during the day were the sharp declines across the crypto complex with Bitcoin breaking below 70k as sentiment continued to deteriorate. Earlier this week the OG HODL’er, Michael Saylor, sold a tiny amount of Bitcoin to fund dividend payments and prices are now below Strategy’s cost basis ~75k.
Futures have been drifting lower overnight and have started to accelerate to the downside as we approach the open. Oil prices and yields are moving higher as the US/Iran continue to exchange fire and there have been no breakthroughs in negotiations. The White House proposed new tariffs of between 10% - 12.5%, to replace the 10% temporary tariffs that were put in place after the IEEPA tariffs were struck down by the Supreme Court. This will be levied against 60 countries including China, the EU, Japan and India. Private credit headlines are back as well after another round of redemption requests were capped at Partners Group and Cliffwater. Futures are near session lows with the S&P down ~0.25% and the R2K off ~0.6%.
This morning the ADP Employment came in strong showing 122k jobs added to the economy with Chief Economist Nela Richardson saying, “Hiring was more broad-based in may than we’ve seen in the last few years.” The distribution of jobs happened across small/medium and large businesses. The only two sectors that saw declines were natural resources and mining (-3k) and information services (-7k). Healthcare and education accounted for nearly half the gains while trade, transportation and utilities added another 36k. Pay for job stayers was flat at 4.4% while job changers moderated to 6.5% from 6.6%. There have been some press reports about incoming Fed Chair Warsh. He sent a memo promising to review Fed strategies and hired conservative analysts Paul Winfree, who authored the Project 2025 blueprint, and Daniel Heil to assist with this. Separately there are reports he could look to remove forward guidance though the statement is already expected to be adjusted to a more neutral stance. A Reuters story even suggests he might not submit a DOT in the SEP (oh no!). Yields have been moving higher they did extend to the upside after the ADP report but have given back most of that leg currently up 3-5bps with some flattening of the curve. The USD index is also moving higher. After the open final services PMIs will be released followed by ISM Services at 10:00. The Beige Book will also be released this afternoon.
Government Yields
- US 2yr +4bps to 4.08%, 5yr +5bps to 4.22%, 10yr +5bps to 4.49%, 30yr +4bps to 4.99%
- USD index: +$0.27 to $99.45
Markets in Asia were mixed overnight while European indices are under some pressure. The Nikkei was the standout closing up 2.55 at a new all-time high driven by continued strength in the tech sector. Speculation of a rate hike in June are growing louder. The only thing that could keep the Kospi from going higher was closing it for a holiday. In China markets were mixed with the Hang Seng falling >1% giving back some of the week’s gains while the Shanghai Comp ended slightly higher. Rating Dog Services PMI came in ahead of expectations. In India there was a positive revision to final services PMI which hit a six-month high however, the Sensex closed modestly lower amidst the continued geopolitical uncertainty. European indices have also been under pressure. Final Services PMIs were revised higher across the region.
Oil prices have been moving higher overnight but have just started to pullback over the last 30 minutes currently up ~1.5%. Metals have been under pressure overnight down ~1%. Ag is moving slightly higher. Crypto continues to be under pressure. According to Coindesk - Visa, Mastercard and Strip will soon introduce a new stablecoin platform.
Palo Alto was the big earnings overnight and the company had strong results but is pulling back modestly after the recent strength, CrowdStrike reports this evening. Elsewhere within software CGNT is moving sharply lower after earnings. The big report after the close is Broadcom.
Earnings:
After-Market: GTLB, PANW, ULTA
Pre-Market: CXM, M, MDT
After-Market: AI, AVGO, CHPT, CRWD, DSGX, FIVE, NTSK, PVH, TLYS, VEEV, WOOF
Economic Data:
US:
- Mortgage Apps: -2.5% w.w prior -8.5%
- 30yr Rate: 6.57 prior 6.65%
- ADP Employment Change: 122k vs. 117k cons., prior 109k
- 9:45 Final Services PMI
- 10:00 ISM Services
- 10:00 Factory Orders
- 10:30 Oil Inventories
- 11:00 Fed Goolsbee
- 2:00 Beige Book
- 4:00 Fed Logan
- China Rating Dog Services: 54.0 prior 53.1
- Japan Services PMI (final): 50 prior 50
- India Services PMI (final): 59.3 prior 58.1
- EU PPI: 0.6% vs. 0.4% cons., prior 3.4%
- EU Services PMI (final): 48.5 prior 47.5
- Germany Services PMI (final): 48.1 prior 47.8
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