The S&P 500 Index ($SPX) (SPY) rose +0.36% on Monday, the Dow Jones Industrial Average ($DOWI) (DIA) rose +0.14%, and the Nasdaq 100 Index ($IUXX) (QQQ) rose +0.66%. June E-mini S&P futures (ESM26) rose +0.32% and June E-mini Nasdaq futures (NQM26) rose +0.61%.
Stock indices ended the day higher, recovering from early losses related to Iran’s disruption of US-Iran ceasefire negotiations. Oil prices rose as much as +8% early in the day and stocks fell after Iranian news agency Tasnim reported that Iran’s government said in a statement that it stopped exchanging messages with the US on a draft ceasefire agreement due to Israel’s intensified attacks on Lebanon. Iran has consistently said that there will be no ceasefire between the United States and Iran without a truce in Lebanon.
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However, renewed hopes for a ceasefire arose later that day after President Trump said he had spoken with Hezbollah officials and Israeli Prime Minister Netanyahu, and that both sides told him they would agree to stop attacking each other. Trump then stated in a post that “talks continue, at a rapid pace” with Iran. Crude oil prices closed the day up more than +5%.
Tech stocks saw support as Nvidia rallied more than +5% after saying it will enter the PC market with a new chip aimed at PCs that seeks to break the dominance of Intel and AMD. Additionally, software stocks performed well, with Microsoft rising more than +2%, after Nvidia’s CEO calmed concerns about AI disruptions.
Stocks also saw support after the May US Manufacturing PMI rose +1.3 points to 54.0, stronger than expectations for a +0.3 point increase to 53.0. However, the final S&P May Manufacturing PMI was revised -0.2 points lower to 55.1 from the preliminary report of 55.3, versus expectations for an unrevised report. Regarding inflation, the May ISM prices paid index fell -2.5 points to 82.1 from 84.6, weaker than expectations for a +0.4 point increase to 85.0.
Markets are looking forward to Friday’s US unemployment report, which is expected to show an unchanged unemployment rate of +4.3% and an increase in payrolls of +89,000.
Markets are pricing in a 5% chance of a +25bp FOMC rate hike at the next FOMC meeting on June 16-17.
The usually favorable first-quarter earnings season is coming to a close. As of last Friday, 84% of the 485 S&P 500 companies that reported first-quarter earnings beat estimates. S&P 500 first-quarter earnings are expected to rise 12% year-over-year, according to Bloomberg Intelligence. Excluding the technology sector, first quarter earnings are expected to rise around +3%, the weakest level in two years.
Foreign stock markets closed mixed on Monday. The Euro Stoxx 50 closed with a drop of -0.26%. China’s Shanghai Composite closed down -0.27%. Japan’s Nikkei Stock Average hit a new record and closed up +0.91%.
Interest rates
The June 10-year Treasury (ZNM6) fell -3.5 ticks, and the 10-year Treasury yield rose +2.4 bps to 4.459%. Treasury bond prices traded lower on Monday’s rally of more than +5% in crude oil prices, which pushed the 10-year implied inflation expectations rate up +1.1 bps to 2.411%.
European government bond yields rose on Monday. The 10-year German Bund yield rose +6.5 bps to 3.003%. The 10-year UK bond yield has risen +8.5 bps to 4.897%.
The swaps price in a 94% probability that the ECB will raise rates +25 bps at its next monetary policy meeting on June 11.
European government bond yields rose. The 10-year German bond yield has risen +7.5 bps to 3.013%. The 10-year UK bond yield rose +8.6 bps to 4.898%.
The swaps price in a 94% probability that the ECB will raise rates +25 bps at its next monetary policy meeting on June 11.
US Stock Engines
Nvidia (NVDA) rallied more than 6% after announcing it will enter the PC market with a new chip, leading to losses of -4.9% for PC chip competitor Intel (INTC), -1.3% for Advanced Micro Devices (AMD) and -8.8% for Qualcomm (QCOM).
Microsoft (MSFT) rallied +2.3% after Nvidia’s CEO downplayed concerns that AI will severely disrupt the software sector.
Taylor Morrison Home Corp (TMHC) rallied +22% following news of its roughly $8.5 billion acquisition by Berkshire Hathaway, which is the first acquisition made by new Berkshire CEO Greg Abel.
Strategy (MSTR) fell -5.8% after a regulatory filing showed the company sold 32 Bitcoin for $2.5 million, at an average selling price of $77,135.
MGM Resorts (MGM) rallied +17% after DealBook reported that Barry Diller’s People Inc will offer to buy the rest of the company at a valuation of $18 billion.
Earnings Reports (6/2/2026)
Dollar General Corp (DG), Donaldson Co Inc (DCI), Palo Alto Networks Inc (PANW), Gitlab Inc (GTLB), Ulta Beauty Inc (ULTA).
On the date of publication, Rich Asplund had no (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. This article was originally published on Barchart.com
