June 5th Market Overview

Happy Friday

Silly red day. A jobs report this strong should be good news, but the market read it as bad and tech took it on the chin. The bond market decided the Fed is done cutting and might even hike. I get the panic, but I think the Fed waits as long as it can. Cool wages give them the cover to.

The chip names dumped overnight are the exact ones Nvidia just picked for its next platform. When the selling is that backwards, it usually smells like positioning, not the story breaking. Panic today is overblown imo but the market gets what the market wants.

Let’s dig in...

Today's Big Picture

1. The Rate Cut Dream Is Dead
   Employers added 172,000 jobs in May. Wall Street expected less than half that. Traders took one look and threw out the rate cut, and now they're betting on a hike before year-end. The funny part is wages actually cooled, and that's the number the Fed cares about most. I'm watching how they play this with the midterms right around the corner.
   

2. The Selloff Is Dumping the Chips Nvidia Just Picked 
   Broadcom's weak guidance Wednesday started the bleeding, and Korea piled on overnight, selling Samsung, SK Hynix and Micron. Then Nvidia's Jensen Huang got up and confirmed all three just qualified to supply memory for its next platform. So we're selling the exact names Nvidia just locked in. That's backwards, and it gave the Nasdaq its worst day in over a year.
   

3. Where the Money Went 
   The cash that left tech didn't leave the market. It walked over to staples and healthcare, the only green on the board today. Procter & Gamble, Coke and Eli Lilly led the way. To me that's people repositioning for the weekend, not the AI story falling apart.

Market Overview

Index Performance

Stock Spotlight

Alphabet $GOOGL ( ▼ 2.1% )  
wants to raise $85 billion to fund its AI buildout, with Berkshire in for $10 billion. A company sitting on this much cash doesn't tap the market unless it thinks capital is about to get more expensive.

Lululemon $LULU ( ▼ 8.31% )  
cut its full-year outlook and hit an eight-year low, blaming weak product launches. The bigger read is the high-end shopper, not just one brand.

ServiceTitan $TTAN ( ▲ 3.04% )  
raised guidance and finished green on a day everyone sold software. That's your evidence the selling was positioning, not broken fundamentals.

Nvidia $NVDA ( ▼ 5.8% )  
held up better than the rest of the chip group, but its market value still slipped below $5 trillion. Every long in the sector is now leaning on it to hold the line.

Big Name Updates

Tesla $TSLA ( ▼ 6.92% )  
got an upgrade to neutral from JPMorgan, which lifted its target to $475 from $145 on the physical AI story. The stock still fell with the rest of the group.

Oracle $ORCL ( ▼ 10.01% )  
kept its buy rating at Guggenheim, which called it a "decade stock" with a $400 target on strong execution.

Strategy $MSTR ( ▼ 11.15% )  
sold part of its bitcoin stash, its first sale since 2022, and that kicked off this week's crypto exit. Bitcoin fell below $60,000 for the first time since October 2024.

Coinbase $COIN ( ▼ 7.65% )  
drew a bearish call from Baird, which cut its target to $142 and expects a revenue miss next quarter.

Other Notable Company News

Docusign $DOCU ( ▼ 6.58% )  
beat and nudged up its revenue guidance, but the stock still fell because the outlook didn't wow the Street.

Onto Innovation $ONTO ( ▼ 8.65% )  
picked up a new buy rating from Deutsche Bank with a $350 target.

Planet Labs $PL ( ▼ 25.81% )  
filed a $1.5 billion stock offering, and the shares dropped after.

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Sector Watch

Bond Market

Bonds sold off all morning, and the jobs number flipped the rate story for the rest of the year.

• The 10-year yield pushed past 4.5%.

• The 30-year cleared 5%.

Higher yields keep pressure on stock prices, especially the expensive growth names. Next week's moves in tech likely follow whatever the bond market does first.

Policy Watch

Fed 
The cut is off the table, and now the real question is whether they hike. Futures put the odds of an October move near 70%, just weeks before the midterms. The pressure isn't coming from wages, which cooled. It's coming from oil and the AI buildout. That leaves Kevin Warsh, in his first meeting as chair, with very little room to move.

Mergers and Antitrust 
A group of states is preparing to sue to block the Paramount and Warner Bros. Discovery merger. California's attorney general, Rob Bonta, is expected to decide soon whether his state joins.

Iran and Energy 
Oil cooled today but is still up sharply for the week. The bigger issue is the Strait of Hormuz staying shut, and two things stand out there:

• A freight executive at trading house Mercuria warned marine fuel could run short by late summer, which would idle part of the global shipping fleet.

• One possible opening: Iran reportedly told Pakistan it would move some of its uranium to a third country.

What to Watch

The AI company quietly automating every Walmart distribution center. 
23 billion in orders on the book.

It's just one of seven names in this free MarketBeat report.

SpaceX IPO (Next Week) 
SpaceX prices next week on the Nasdaq at a $1.77 trillion valuation. S&P refused to fast-track it into the 500, so index funds tracking the S&P won't be forced buyers for at least a year. Nasdaq went the other way, which could open a real gap between Nasdaq trackers and S&P trackers.

Apple WWDC (Next Week)
Apple is expected to show a rebuilt Siri running on Google's Gemini. The real question is whether Apple builds its own AI business or just rents someone else's.

Thanks for reading - you are now the more informed 🙂

- John

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