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May’s payroll figures will show how labor conditions are holding up aid trade uncertainty. (1:23) Jamie Dimon sees crack in bond market coming. (3:51) BofA sees major market inflection point. (5:24)
Wall Street starts June with a strong performance in May under its belt. The S&P 500 (SPY) gained 6.1% for the month, its best performance since an 8.9% rise in November two years ago.
Preliminary results from the 2025 reconstitution of the Russell U.S. indexes show that the U.S. equity market has grown significantly over the past year. As of the April 30 rank day, the total market capitalization of the Russell 3000 Index rose 10%, reaching $58.4 trillion, up from $53.0 trillion at the time of last year’s rebalance.
On the macro front, the major news bookends the week. On Monday afternoon, Fed Chairman Jay Powell will deliver opening remarks at the Federal Reserve Board’s International Finance Division 75th Anniversary Conference.
Powell is coming off his first meeting with President Donald Trump in the latter’s second term, with Trump urging Powell to lower rates.
But the Fed later released a statement that the Federal Open Market Committee, will “set monetary policy, as required by law, to support maximum employment and stable prices.” Those decisions will be “based solely on careful, objective, and non-political analysis.”
On Friday, the May employment report is due, with economists expecting a gain of 130,000 in nonfarm payrolls and unemployment rate staying steady at 4.2%.
Wells Fargo economists say: “May’s employment report will offer the first real look at how the labor market is faring under a rapidly changing trade environment. The figures will capture hiring that occurred in the initial weeks following the ‘Liberation Day’ tariff announcements, a period in which uncertainty about economic policy and growth reached a fever pitch.”
“The appetite to hire among firms remains tepid. New job postings on Indeed fell to their lowest level since 2020 in May, hiring plans among small businesses are back near their cycle lows and PMI readings of employment continue to hover near contraction territory. May is also typically one of the stronger months of the year for hiring, so the dampened interest in bringing on new workers could be amplified by seasonal factors expecting more additions to the payroll.”
“Yet, the wait-and-see mode that has firms cautious to hire applies to efforts to retain existing employees. As a result, the still-low level of layoffs indicated by initial jobless claims should prevent net hiring from collapsing in May under the weight of recent uncertainty,” they said.
Earnings continue to thin out, but investors will get results from Broadcom (NASDAQ:AVGO) and CrowdStrike (NASDAQ:CRWD).
For Broadcom, analysts expect a 43% Y/Y increase in profit and nearly 20% growth in revenue. The stock has surged over 74% in the past 12 months, driven largely by momentum in AI-related demand and strong positioning in the semiconductor space.
SA analyst Michael Del Monte reiterated a Buy rating with a $265 price target, citing sustained hyperscaler capital spending from companies like Meta, Microsoft, Amazon, and Alphabet as key growth drivers. While AVGO trades at a premium, Del Monte sees additional upside fueled by strong compute and networking demand, though he advises investors to watch for volatility around earnings.
Cybersecurity company CrowdStrike is expected to post EPS of $0.66 on revenue of $1.11 billion. RBC analysts recently expressed an optimistic view on software stocks for 2025 as recent checks on the software sector suggest stable demand trends despite ongoing macro or tariff uncertainty. In the cybersecurity segment, RBC increased the price target for CrowdStrike, citing continued success with cross-selling efforts.
Also on the earnings calendar:
On Tuesday, Hewlett Packard Enterprise (HPE) and Dollar General (DG) join CrowdStrike (CRWD).
Dollar Tree (DLTR) weighs in on Wednesday.
Along with Broadcom, Lululemon Athletica (LULU), DocuSign (DOCU), Samsara (IOT) and Rubrik (RBRK) issue numbers on Thursday.
In the news this weekend, JPMorgan Chase (JPM) Chairman and CEO Jamie Dimon has warned that the rising federal debt can threaten the U.S. bond market unless the government takes remedial measures.
“You are going to see a crack in the bond market,” Dimon said the Reagan National Economic Forum in California, according to the FT. “I’m telling you this is going to happen.”
His comments came as Trump’s sweeping multi-trillion-dollar tax break package makes its way through the Senate after clearing the House by a narrow margin last week.
“I just don’t know if it’s going to be a crisis in six months or six years,” Dimon said, urging the government to “change the trajectory of the debt” and calling on lawmakers to ease rules that have restricted banks’ bond trading capacity.
And China EV makers reported May delivery numbers.
XPeng (XPEV) delivered 33,525 Smart EVs, up 230% year-over-year. Year to date, the company delivered 162,578 Smart EVs, a 293% increase compared to the same period last year.
Li Auto (LI) has delivered 40,856 vehicles, up 16.66% from the same period last year and up 20.38% from April.
And NIO (NIO) delivered 23,231 vehicles, an increase of 13.1% year-over-year, but down sequentially for the third month.
For income investors, Harley Davidson (HOG) and Lockheed Martin (LMT) go ex-dividend on Tuesday. Harley-Davidson pays out on June 18 and Lockheed pays out on June 27.
Halliburton (HAL) goes ex-dividend on Wednesday, with a June 25 payout date.
BlackRock (BLK) goes ex-dividend on Thursday, paying out on June 23.
And in the Wall Street Research Corner, BofA says financial markets are entering a high-stakes inflection point.
Risk assets are “coiled” for a major move — either an explosive breakout or a sharp breakdown — with brokers, banks and Bitcoin acting as key indicators, strategist Michael Hartnett says.
Markets are “whispering big breakout or breakdown,” Hartnett said, pointing to several exchange-traded funds and crypto prices. “The tells? Brokers (XBD [at] $900), banks (IXG [at] $105), Bitcoin ($110K).”
Clean upside breaks would be very bullish; double tops on charts would be very bearish, he said.