U.S. Futures & World Markets

US stocks are set to open higher after closing at record highs on Friday — the 9th consecutive winning week for stocks. Crude oil is +3%, but the market continues to price in an eventual peace agreement with Iran.

This rally has been driven mostly by mega-cap tech and semiconductor stocks. In May, the S&P 500 gained 5.15% and the Nasdaq was up 8.36%. Market breadth still hasn't meaningfully expanded — something we'll need to see if this tape is to move meaningfully higher. A healthier rally would involve more participation beyond the handful of names carrying the market.

I'll end with Ezra Klein, who had a good take on reading — and how it applies to AI:

"Part of what is happening when you spend 7 hours reading a book, is you spend 7 hours with your mind on the topics in the book, grappling with them, drawing connections, having thoughts you would not otherwise have had. Without that process of grappling, it doesn't get inside you. It doesn't change you. What reading and writing and processing information is supposed to do is change you."

Ezra Klein

AI may give you the answers easily — but understanding still requires work.

S&P Futures vs. Fair Value: +21.00  |  10-Year Yield: 4.46%

CORE Headlines

Charts & Data

S&P 500 without AI stocks is still DOWN 0.66% since the war began. Bianco Research: "Feb 27 is the day before the war began. The S&P 500 is up 10%+ since then. But the S&P WITHOUT the AI stocks is still down 0.66%. Maybe soaring gas prices are having an impact on the market after all — just not where everyone is looking."

Goldman base case: positive equity returns through year-end, modest positioning. Goldman Sachs: "Our US equity Sentiment Indicator currently registers just 0.2, pointing to modest investor positioning. An improvement in the geopolitical outlook or dovish shift in rate market pricing would spur further equity market upside."

Tech sector at 37% of S&P 500 market cap — all-time high, above the dot-com peak of 35%. The Kobeissi Letter: "The Information Technology Sector now accounts for 37% of the S&P 500's market cap — nearly doubled since the 2020 market bottom. Tech stocks also account for a record 91% of total US GDP."

$1 into the S&P ETF: 18¢ semis, 37¢ Mag 7, 41¢ top 10 — all records. Scott Rubner, Citadel via Daily Chartbook: "If you allocate $1 into the S&P 500 ETF today: ~18 cents goes to semiconductors (record), ~37 cents to the Magnificent 7 (near-record), ~41 cents is concentrated in the top 10 holdings (record)."

SOX rally mostly backed by real earnings growth — the key question is whether it continues. Holger Zschaepitz: "The SOX index has risen sixfold since 2020, while SOX EPS has climbed fivefold. Most of the rally has been backed by real earnings growth, not just higher valuations."

Q2 earnings revisions: largest upward revision in first two months of a quarter since Q3 2021. John Butters, FactSet via Daily Chartbook: "The second quarter marks the largest increase in the bottom-up EPS estimate during the first two months of a quarter since Q3 2021 (+3.8%)."

Gas as share of disposable income still below historical average at 2.3%. BofA via Daily Chartbook: "Gas makes up a smaller portion of the consumer wallet relative to the historical average (~2.8%) and prior energy shocks." Higher gas prices are painful but not yet economy-breaking.

56% of CEOs think AI will have only moderate impact on their industry. The Conference Board: "The majority of CEOs (56%) felt that AI would not fundamentally transform their industry. Nearly 1 out of 4 CEOs felt that over 50% of their workforce would need to be upskilled within two years."

If Iran conflict ends, bond yields fall and rate cuts become possible. Jim Paulsen via Daily Chartbook: "Should the Iran conflict soon end, this correlation should turn more positive — reflecting less worry about inflation and more worry about recession — allowing Fed cuts and bond yields to decline."

Bitcoin ETFs see 9-day outflow streak — longest since launch. Bloomberg via Daily Chartbook: US spot Bitcoin ETFs recorded about $2.8 billion of net outflows from May 15 through May 28 — the longest stretch of redemptions since the ETFs launched in January 2024.

BofA private client cash at a record low 10%. BofA via Daily Chartbook: "Private client cash allocation plunges to a record low 10%." The pool of incremental buyers is shrinking.

June: worst month in midterm years, but higher 9 of the last 10 years. Ryan Detrick via Daily Chartbook: "One one side, June is the worst month of the year in a midterm year. On the other hand, June has been higher nine of the past 10 years."

When April + May both gain 10%+, rest of year averages +19%. Ryan Detrick via Daily Chartbook: "After April and May gain more than 10% like 2026, the rest of the year has gained double digits each time, up an average of nearly 19%."

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This content does not constitute legal, tax, accounting, or other professional expert advice. Everything published is believed to be reliable, but its accuracy or completeness is not assured. Past performance does not indicate future results. The opinions expressed herein are subject to change without notice and are solely those of the author as of the date indicated.