June 2nd Market Overview

Happy Monday.

Decent start to June! Markets bounced back after some early China drama - steel stocks went nuts on Trump's tariff news while automakers took it on the chin. Tech held up well which is always a good sign.

Hoping this Trump-Xi call actually happens this week and we get some clarity/certainty.

Let's dig in...

Executive Summary

1. Market Recovery: The S&P 500 and Nasdaq finished higher after shrugging off U.S.-China trade flare-ups, with tech stocks leading the afternoon recovery.
   

2. Steel Tariff Winners: Trump’s decision to double steel and aluminum tariffs to 50% effective Wednesday drove domestic steelmaker gains while pressuring automakers on input cost concerns.
   

3. Manufacturing Weakness: ISM index contracted to 48.5 in May, with new export orders hitting their lowest level since 2009 excluding the pandemic period.
   

4. Oil Surge: Crude gained on Ukrainian drone strikes destroying Russian strategic bombers, OPEC+ steady production increases, and falling U.S. rig counts.

Market Overview

Key Market Drivers

1. China Pushback: Beijing denied violating the trade truce, blaming Washington for “discriminatory measures” including AI chip controls and visa restrictions. Trump-Xi call expected this week could determine market direction.
   

2. EU Trade Tensions: European Union warned Trump’s steel tariffs “undermine negotiations” and sent a trade team to Washington. EU prepared to impose countermeasures if talks fail.
   

3. Manufacturing Contraction: ISM data showed persistent weakness with inventories, imports, and export orders declining significantly while prices remained elevated.
   

4. Energy Market Dynamics: Ukraine’s assault on four Russian airbases reportedly damaged 30% of strategic bomber fleet. OPEC+ maintained July output increases of 411,000 barrels daily.
   

Stock Spotlight

Cleveland-Cliffs $CLF ( ▲ 1.63% ) led steel sector gains as domestic producers gained immediate pricing power over foreign competitors facing the tariff. Steel Dynamics $STLD and Nucor $NUE followed as tariff protection reshaped sector dynamics.

Tesla $TSLA ( ▲ 1.39% ) declined on weaker May sales across multiple European markets including Sweden, France, Spain, Denmark, and the Netherlands. Only Norway showed improvement from the revamped Model Y.

Regeneron $REGN ( ▼ 0.97% ) advanced after experimental drug trevogrumab showed early promise helping obesity patients retain muscle mass when combined with Novo Nordisk’s $NVO Wegovy.

BioNTech $BNTX ( ▼ 0.85% ) gained following Bristol Myers Squibb’s $BMY multi-billion dollar partnership for co-developing experimental cancer treatments.

Meta Platforms $META ( ▼ 2.27% ) pressured advertising stocks as reports emerged of plans to fully automate ad creation with AI by end of 2026, threatening traditional agency models.

Big Name Updates

Nvidia $NVDA ( ▲ 0.87% ) hit $3.36 trillion market cap, moving within 2% of overtaking Microsoft $MSFT as most valuable company. Analysts expect Nvidia’s growth to average 32% annually versus Microsoft’s 15% despite Microsoft generating twice the revenue.

Alphabet $GOOGL ( ▼ 0.2% ) enhanced Gmail with Gemini AI auto-summarization of lengthy emails without requiring user clicks.

Apple $AAPL ( ▼ 0.3% ) maintained momentum ahead of next week’s WWDC conference, with Citi emphasizing the company’s “full stack” advantages in personal AI through custom silicon and 2.35 billion user ecosystem.

Amazon $AMZN ( ▲ 0.2% ) received Bank of America target increase as analysts highlighted accelerating robotics deployment reducing labor dependency and improving warehouse efficiency.

Microsoft $MSFT ( ▼ 0.59% ) announced $400 million Swiss data center expansion continuing global cloud infrastructure buildout.

Other Notable Company News

Applied Digital $APLD ( ▲ 15.97% ) secured two 15-year lease agreements with Crown Castle $CCI for 250MW of critical IT load plus 150MW option at North Dakota facility.

Blueprint Medicines $BLUE ( 0.0% ) agreed to Sanofi’s $SNY $9.5 billion acquisition offer marking the French pharma giant’s largest biotech deal.

Moderna $MRNA ( ▲ 0.25% ) received FDA approval for next-generation COVID vaccine with restrictions limiting use to adults 65+ and those 12+ with risk factors.

DraftKings $DKNG ( ▲ 1.69% ) and Flutter Entertainment $FLUT declined after Illinois approved new sports betting fees of $0.25-$0.50 per bet.

Boeing $BA ( ▼ 1.21% ) gained on Bank of America upgrade citing the company’s role as “favored trade tool” in Trump administration negotiations.

Taiwan Semiconductor $TSM ( ▲ 1.06% ) faces mounting costs with 2nm chips expected at $30,000 per wafer and $725 million total development costs.

Campbell Soup $CPB ( ▼ 0.52% ) navigating tariffs on multiple fronts including retaliatory duties on Canadian soup exports and steel costs for cans.

Hims & Hers $HIMS ( ▼ 2.0% ) announced 4% workforce reduction as part of operational streamlining.

Sector Watch

Bond Market

The 10-year Treasury yield reached 4.455% as markets absorbed trade tensions and manufacturing weakness. Treasury Secretary Bessent pledged the U.S. “will never default” while aiming to reduce the budget deficit.

• Reports suggest Trump administration considers easing post-2008 capital rules for large banks
• Bessent indicated scaling back supplementary leverage ratio could help banks buy more Treasuries
• Potential yield reduction of up to 60 basis points “over time” according to Treasury Secretary

Policy Watch

Federal Reserve Chair Jerome Powell avoided policy specifics at International Finance Division conference. Governor Waller suggested “good news” rate cuts possible this year if tariff impacts prove temporary.

• Commerce Secretary Lutnick emphasized tariffs are “not going away”
• EU voted to restrict Chinese companies’ access to medical-device procurement markets
• European flight bookings to U.S. down 12% through August amid policy concerns
• U.S. Bank strategists noted markets “range-bound until tariff clarity” emerges

What to Watch

1. Trump-Xi Call: Direct conversation expected this week could provide trade clarity and determine whether markets reach new highs or remain range-bound.
   

2. Steel Price Discovery: With 50% tariffs effective Wednesday, watch immediate price adjustments in metals markets and cost-pass-through strategies from steel-intensive industries.
   

3. Friday Jobs Report: May employment data will reveal tariff policy impacts on labor markets, particularly in manufacturing given today’s ISM weakness.
   

4. EU Retaliation: European Union threatened countermeasures against U.S. steel tariffs. Specific retaliatory duties could escalate tensions beyond China.
   
   
   Thanks for reading 🙂
   
   - John
   

Today’s Sponsor

The Father-Son Duo Rethinking Homebuilding

Home construction has been slow, costly, and inefficient for centuries. So in 2017, Paolo and Galiano Tiramani founded BOXABL to change that.

Where traditional homes take 7+ months to build, new homes can roll off BOXABL’s assembly line nearly every 4 hours. Equipped with plumbing, electrical, and HVAC, they’re ready to be delivered and lived in.

They have already built more than 700. That gained the attention of one of America’s top homebuilders, who also became investors.

Now, the Tiramanis are preparing for Phase 2, where modules can be configured into larger townhomes, single-family homes, and apartments.

And until 6/24, you can join as an investor for just $0.80/share.

Invest in BOXABL Today

_{*This is a paid advertisement for Boxabl’s Regulation A offering. Please read the offering circular at https://invest.boxabl.com/#circular}