It was a rocky start to June trading for the major indices. After hitting an all-time high on Thursday on resilient economic data and analyst upgrades, the Dow Jones Industrial Average slipped Friday on an unexpectedly strong jobs report that sparked concerns a Fed rate hike may be on the table. Meanwhile, the tech heavy S&P 500 and Nasdaq Composite struggled amid a revenue miss and disappointing AI outlook from chipmaker Broadcom. The stock’s slide rippled across the semiconductor space, sparking a chip stock sell-off to close out the week. With the Q1 earnings season in the rearview, Wall Street now turns to the Fed’s June Meeting.
Economic Highlights:
- The labor market scored its third straight month of payroll gains in May. Nonfarm payrolls rose 172K, crushing analysts’ estimates of 80K. May’s reading was down only slightly from April’s upwardly revised 179K print. June’s gain kept the unemployment rate steady at 4.30% as forecasted. On a positive note for jobseekers, the breadth of job gains improved in May with multiple sectors seeing solid advances. Leisure and hospitality, local government, healthcare, and social assistance led the way higher.
- The U.S. services industry expanded in May as businesses replenished inventories and preemptively placed orders in anticipation of shortages and higher prices stemming from the war in the Middle East. The ISM Services Index rose to 54.5 in May from 53.6 in April. Numbers above 50 indicate expansion while those below signal contraction. New orders, business activity, and inventories all drove the index higher.
- U.S. manufacturing hit a 4-year high in May, driven by the AI buildout boom and businesses front-loading orders amid rising prices and shortages driven by the Iran war. The ISM Manufacturing Index rose to 54 in May from 52.7 the previous month. New orders, exports, and production all drove the headline figure higher.
Dow Jones Industrial Average Hits Record High As Semi Chips Dip
This week, investors traded semi chips for blue chips, powering the Dow Jones Industrial Average to an all-time high on Thursday on strength in healthcare and financials. In the healthcare space, UnitedHealth Group and Eli Lilly rallied on analyst upgrades on improving medical cost trends and strong demand for GLP-1 weight loss and diabetes treatments. In financials, Goldman Sachs and JPMorgan got a lift from SpaceX’s upcoming IPO. The Street has been buzzing over reports and Wall Street pitches detailing the massive fees they stand to collect from the initial public offering. The S&P 500 and Nasdaq however took a breather from all-time highs this week, weighed down by a disappointing outlook from chipmaker Broadcom which saw tech stocks slip in sympathy. Tech stocks, in particular AI names, have rallied strongly this year as investors have expected robust earnings will continue for the next few quarters. On the macro front, the U.S. economy continued to show exceptional resilience in light of Middle East tensions and elevated prices. The jobs market showed renewed signs of life, notching its third straight positive month. The strong jobs report comes on the heels of continued expansion in the services and manufacturing sectors. The latter has ticked higher on resilient demand and businesses pulling spending forward in light of the on-going Iran war. Despite weeks of negotiations, a peace deal remains elusive with a pickup in missile and drone action reported in recent days across the Middle East.
Heading into Friday’s trading session, the economically sensitive Dow appeared poised to close on a high note on continuing signs of a resilient U.S. economy, despite contending with the Middle East war and elevated prices. Counter-intuitively, an unexpectedly strong jobs report on Friday rattled both stock and bond investors. Although good for jobseekers, the improving employment picture was not so good for rates. The 10-year US Treasury bond slipped, sending the yield surging to 4.54% as traders bet a Fed cut is unlikely in the cards anytime soon and a rate hike possibly being placed on the table. With the June Fed meeting just days away, Fed policymakers will have next week’s inflation data as well as the latest jobs report to mull over as they look ahead to what monetary policy will look like for 2H 2026. The post meeting comments from Powell’s successor, Kevin Warsh, will surely be carefully parsed as investors learn to interpret the tea leaves from Warsh’s reform-oriented leadership style.
The Week Ahead
Key reports include CPI, PPI, and existing home sales.
The Toll and Triumph of the Greatest Generation
Tomorrow marks the 82nd anniversary of D-Day, the June 6th, 1944, invasion of Normandy by Allied troops along a 50-mile stretch of coastline in northern France. D-Day and the Battle of Normandy that followed it created a turning point in World War II, giving the Allies a foothold in Western Europe to turn the tide against Nazi forces. By August 1944, northern France had been liberated, and by the spring of 1945, the Allies had defeated the Germans with Germany officially surrendering in May 1945.
Historians often refer to D-Day as not just the beginning of the end of World War II, but as one of the most significant military operations ever executed. It involved more than 156,000 soldiers, sailors, and airmen made up of major forces from the U.S., Canada, the United Kingdom, and 12 other Allied nations. Approximately 23,400 airborne troops jumped into Normandy from 822 aircraft and gliders. The invasion also involved more than 7,000 naval vessels; including 4,000 landing craft and 1,200 warships. About 12,000 aircraft supported D-Day from the skies. The massive scale of logistics involved was unprecedented.
Over the past eight decades, D-Day veterans have participated in remembrances and ceremonies to pay tribute to those who never returned home, share their experiences, and ensure the lessons and sacrifices of that day are never forgotten. Most WWII service members were born between 1907 and 1928, meaning even the youngest veterans are now approaching 100 years of age. As their ranks diminish, tomorrow’s D-Day ceremonies will take on even greater significance for the next generation to carry their memory and legacy forward, reminding us that the freedoms we cherish today are due to the courageous and selfless sacrifices of thousands of young soldiers of the Greatest Generation who stormed the beaches of Normandy 82 years ago.
Many of the brave soldiers who lost their lives on D-Day were laid to rest in the cemetery that overlooks the beaches where they fought. The Normandy American Cemetery in Colleville-sur-Mer, France holds the remains of nearly 10,000 U.S. soldiers who bravely gave their lives for the cause of freedom. In addition, approximately 1,600 names are inscribed on the Walls of the Missing on the grounds of the cemetery. Each year in remembrance of D-Day, Normandy hosts a festival from the end of May to mid-June that takes place along the entire coastline of D-Day and the Battle of Normandy. The festival includes nearly 100 events such as parades, concerts, historical re-enactments, fireworks, exhibitions, parachuting, and more.
Another solemn tradition takes place in Normandy to pay tribute to the sacrifice made by these soldiers who lost their lives to liberate Europe from Nazi occupation. When relatives or visitors come to honor a service member and lay flowers at the Normandy American Cemetery, sand from the beach is rubbed into the inscription of the headstone to make it more visible. You can view a video of this here. Additionally, Taps is played every evening at the cemetery to reflect the gratitude of a nation and renew the pledge to honor those who gave their lives for freedom.
The French government granted the cemetery to the U.S. as a perpetual concession following WWII for the U.S. to create a permanent memorial. The American Battle Monuments Commission (ABMC) took responsibility for designing and maintaining the cemetery. It is widely regarded as one of the most moving and architecturally precise war cemeteries in the world. There are 9,388 graves marked with white marble headstones of either a cross or a Star of David. Each grave faces west towards America to symbolize the soldiers’ journey home. The headstones of unidentified soldiers are marked with, “Here Rests in Honored Glory a Comrade in Arms Known But to God.” The markers are placed in uniform rows running both parallel to the beach (horizontal lines when viewed from above) and perpendicular to it (vertical lines when looking straight down the slope). The marble tombstones are etched with the soldier’s name, rank, unit, state of enlistment, date of death, and military service number. In addition to the cemetery in Normandy, the ABMC operates and maintains 25 other permanent American military cemeteries and 31 federal memorials, monuments, and markers, in 17 countries throughout the world, including the U.S. Normandy is ABMC’s most visited cemetery, welcoming more than one million visitors each year. You can view a brief video overview of the Normandy American Cemetery on the ABMC website here.
As our country approaches its 250th anniversary next month, tomorrow’s D-Day anniversary hopefully reminds us to reflect on the freedoms we cherish and feel gratitude for those who made it possible.