U.S. Futures & World Markets

S&P futures are mixed premarket as renewed hostilities between the US and Iran weigh on investor sentiment. Crude oil and Treasury yields have both moved higher on the news, which shouldn't come as a surprise.

Even with the geopolitical noise, semiconductor stocks are set to open higher again. Palo Alto Networks reported a great quarter but the stock is down 2% premarket — a reminder that earnings are only half the battle. PANW was up almost 100% heading into earnings, so down only 2% actually feels like a win given the setup.

Scott Rubner of Citadel had a striking data point in his note yesterday:

"The S&P 500 has now gained 20% since the end of March, yet the rally has been remarkably narrow beneath the surface. In fact, 68% of the index's advance has been driven by just 10 companies."

Scott Rubner — Citadel Securities

That is the very definition of narrow leadership. At some point investors will want to see participation broaden beyond the usual mega-cap and AI-related names — but who knows when.

S&P Futures vs. Fair Value: -8.00  |  10-Year Yield: 4.49%

CORE Headlines

Charts & Data

68% of the S&P's 20% gain since March driven by just 10 companies. Scott Rubner, Citadel via Daily Chartbook: the concentration of the rally is staggering by any historical measure.

Since March low: 38 of the top 50 performers are Tech — including all of the top 13. Bespoke via Daily Chartbook: "It's been Technology and everyone else." The AI trade is not just the S&P story — it IS the S&P story.

% of S&P stocks outperforming the index at a 50-year low. NDR via Daily Chartbook: "The percent of S&P 500 stocks outperforming the index over the last two months is at its third-lowest reading since 1972. Both prior cases saw a change in leadership that lasted several months shortly after the extremes." A potential rotation signal worth watching.

92 trading days without a 2% decline — through a government shutdown, Iran war, oil shock, and new Fed chair. T1Alpha via Daily Chartbook: "Positioning > narratives." The tape has been relentless even as the headlines have been relentlessly bad.

AI is fueling a surge in new business formation. Torsten Slok, Apollo: "The surge in new US business formation is being fueled by AI and large language models, which are dramatically reducing the cost and complexity of launching a company." Scale cuts both ways though — as some firms grow and others get disrupted, the labor market impact will be meaningful.

10-year CPI at highest level on the way up since late 1972. @oddstats via Daily Chartbook: "Instead of looking at the usual one year inflation, I wanted to know how much more expensive things are vs 10 years ago. It's the highest it's been on the way up since late 1972. The big news at the time was America trying to end an unpopular war and a looming oil crisis — and you can see what happened next." An ominous historical parallel.

US large cap ETFs dominate inflows for another week. Arbor Data via Daily Chartbook: "US large cap ETFs continue their dominance with largest inflows for yet another week ended 5/29/26. Global ETFs led outflows." Capital keeps flowing to the same concentrated trade.

Schwab Retail Survey: 58% of retail clients are bearish on US stocks. Schwab via Daily Chartbook: stunning divergence — retail investors say they're bearish while simultaneously putting record money to work in the market. Actions speak louder than surveys.

Options market says everyone is a bull — single-stock put-call skew at lowest ever in Goldman's dataset. Goldman Sachs via Daily Chartbook: "S&P average single-stock 1-month put-call skew has now collapsed to the lowest level in Goldman Sachs' entire dataset. Translation: Everyone is a bull." Extreme complacency in the options market.

Short interest at highest in over 15 years — a future buying catalyst. Bloomberg via Daily Chartbook: "The median short-interest for S&P stocks has reached the highest in over 15 years." Record short interest is a headwind for bears and future fuel for bulls.

Sector correlations 2 standard deviations below long-run mean — excessive confidence. Datatrek Research: "Average sector correlations are now 0.56, which is more than 2 standard deviations below the long run mean (0.80) and suggests excessive investor confidence." When correlations collapse like this, it signals extreme dispersion — and the potential for a sharp reversal when they mean-revert.

Software stretched: weak near-term returns, strong 3M-1Y outlook historically. Bespoke via Daily Chartbook: "On average these instances have generally seen weaker than normal returns for IGV in the near term with stronger than normal performance three months to one year out." A near-term pause may set up a longer-term opportunity.

Bitcoin liquidations top $1 billion on recent drop. CoinGlass via Daily Chartbook: crypto's rough stretch continues. Capital rotating out of Bitcoin and into AI-adjacent equities is a theme worth watching.

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