Market Commentary
For the week ending 6/5/2026
The S&P 500, Nasdaq and Dow Jones Industrial Average all closed at all-time highs last Monday and Tuesday as Wall Street’s technology-heavy rally continued. However, the market ended the week with some rotation out of the high-flying technology and AI-focused stocks and into other sectors that have lagged in recent months, specifically healthcare and financials. The large-cap indices declined from their recent highs on Friday as investors weighed updates related to the conflict in Iran, fluctuating oil prices, and various economic and employment data.
Wall Street opened the week by reaching historic peaks, including a rare nine-week winning streak for the S&P 500. While the Dow Jones Industrial Average crossed the 51,000 threshold for the first time ever, the tech-heavy Nasdaq declined slightly later in the week. Marvell Technology rocketed +32.5% on Tuesday to record highs after Nvidia’s CEO Jensen Huang delivered a rare and powerful endorsement, calling Marvell the “next trillion-dollar company.” This helped boost semiconductor sentiment on Tuesday. However, technology shares retreated some on Thursday following a lackluster earnings report from semiconductor giant Broadcom, which triggered broader concerns about a potential near-term slowdown in corporate artificial intelligence infrastructure spending. The rotation out of tech stocks continued on Friday. Technology, semiconductors and AI-related stocks have been the huge leaders over the past two months and were overdue for some profit-taking. The good news is that the market seemed to be in a rotational period rather than a selloff, as the healthcare and financials sector were both rising at the end of the week. Notably, these two sectors are the worst-performing S&P 500 sectors on a year-to-date basis, highlighting the rotational aspect of the market sentiment. Generally speaking, this sort of broadening in market participation is considered to be healthy for the stock markets.
On the geopolitical front, a surge in crude oil prices following reports that Iran had stopped messaging the U.S. in protest of Israel’s strikes in Lebanon also affected investor sentiment. Oil prices pared back a little after President Trump stated that discussions with Iran were continuing “at a rapid pace.” The state of U.S.-Iran negotiations remains muddy, after reports of fresh military strikes and drone attacks flared up throughout last week, testing the limits of the already tenuous ceasefire. President Trump seems reluctant to reignite the war with Iran, at least for now. Trump also reportedly had a contentious call with Israeli Prime Minister Netanyahu on Tuesday. Then, on Thursday Israel and Lebanon agreed to renew their ceasefire, contingent primarily on Hezbollah halting its attacks. Hezbollah later rejected the terms of that ceasefire. West Texas Intermediate (WTI) crude oil prices spiked back over $95/barrel midweek before pulling back off that level.
May ISM Manufacturing Index came in a bit ahead of expectations and the new orders component rose. However, respondents leaned notably cautious, flagging ongoing uncertainties and price pressures (particularly energy costs) related to the US-Iran conflict. May ISM Services Index was also slightly ahead of consensus expectations, however prices paid rose, a sign of continued inflation. Respondent commentary from this report was also cautious with many mentions of price pressures, related to Iran tensions and tariff policies.
Meanwhile, April JOLTS job openings came in ahead of Wall Street’s consensus, while both new hires and the quit rate moved lower. The May ADP payroll report was also a bit better than expected with small businesses accounting for the bulk of the gains in that report. Weekly initial jobless claims had been rather tame for weeks, but last week they spiked above consensus to the highest level since February. However, continuing weekly jobless claims remained low and a touch below the consensus. On Friday the government released the official May jobs report which showed 172,000 jobs added, which was double the consensus of 86,000 jobs. The unemployment rate remained low at 4.3% in-line with expectations. This final jobs report of the week displayed a healthy labor market, which slightly increased the odds that the Fed’s next move would be an interest rate hike, rather than a rate cut.
Overall, this week reflected a sector rotation and a healthy broadening in market participation, with investors moving into financials, health care, and other previously lagging groups, as technology stocks took a breather after a massive rally. The fact that there was still some buying going on, despite a notable semiconductor pullback suggests underlying market sentiment remains constructive, particularly as investors continue to buy weakness rather than retreat from risk assets.
For the week, the Dow dipped -0.3% to 50,867. The S&P 500 fell -2.6% to 7,384, and the Nasdaq closed down -4.7% to 25,709.
Oil rose 3.6% to $90.54/bbl. Gold fell -5% to $4,365/oz. and the yield on the 10-year Treasury nudged up to 4.54%.
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