The broader market is mixed this afternoon, but has recovered from this morning’s decline following the ISM Manufacturing and PMI releases, which came in below estimates (more below). News of a potential meeting between China and USA added fuel to the slight recovery.

Most Magnificent Seven names are moving higher, Meta Platforms (META) is the best performer within the group after announcing the company is aiming to fully automate advertising with AI by 2026. Alphabet (GOOG/L) and Tesla (TSLA) are the only laggards in the group.

Four sectors are in the green with Energy (XLE) leading the way driven by strong oil prices today. Consumer Discretionary (XLY) is one of the worst performing sectors, driven lower by gambling stocks and automakers.

Illinois Impact

Gambling stocks are contributing to the lower move in Consumer Discretionary after Illinois approved a new budget allowing levies on each betting wager.

Oil Move

Oil initially rose by over 5% earlier in the morning, the largest increase since April as geopolitical continues to build (i.e. Russia and Ukraine, and U.S. and Iran) and partially offset by OPEC+ agreeing to an output hike. OPEC+ said in a statement on Saturday that eight participating countries agreed to increase output by 411,000 barrels per day.

Economic Data

Final May S&P PMI numbers were revised lower to 52 from the preliminary reading of 52.3, but above last month’s reading of 50.2. Inventories and New Orders increased as companies try to front-run tariffs. Notably, the net change in employment was positive for the first time in three months.

May’s ISM Manufacturing PMI, on the other hand, fell to 48.5 from 48.7 and below estimates of 49.5.

Notable Points:

• New Order’s edged higher to 47.6 from 47.2
• The Production Index rose to 45.4 from 44
• The Price Index moved marginally lower to 69.4 from 69.8
• Backlog of Orders rose to 47.1 from 43.7
• Employment increased to 46.8 from 46.5

Comments indicate that tariffs are being weighed heavily by firms, but companies are currently in a “wait and see” stance before reacting.

Atlanta Fed GDPNow is now tracking Q2 GDP growth rate at 4.8%, up from 3.8% on May 30^th.

Comments

The above statements are hardly reassuring. The company I worked for had a container coming in worth 300 k but tariffs were pushing the cost way higher. I believe they refused it. If these managers have no confidence conducting their business, how are investors supposed to ascertain the market ? Which is why I’m not in it now. Dave Nederostek on 6/2/2025 2:15:25 PM

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