The market clocked in another slim gain, but as they say, “the breakout to all-time highs begins with tiny steps.” Okay, they never said that, but these incremental moves reflect the basis of the market. After that monster rebound yesterday, the S&P 500 (SPX) is well above where it traded on Liberation Day.

Even though it's inching higher, it's still a coiled spring looking to lunge higher. Meanwhile, all systems are short and medium for the S&P 500 and NASDAQ-100, and small-caps act much better. Many investors will chase the market by buying the laggard; the small-cap universe is nutrient-rich.

Small-cap value has caught a bid this week, and the S&P 600 Small Cap Index (SML) enjoyed the most significant share advancers.

The SML is still below its 200-day moving average, which oddly makes it more attractive for traders.

Retail Isn’t Dead

Dollar stores popped big yesterday and were joined by solar stocks (Musk social media post) and Technology (XLK).

Don’t write off the move in dollar store shares as a one-off proxy for struggling consumers. The SPDR S&P Retail ETF (XRT) is in lift-off mode.

Nobody Will Touch the Stuff

You can't go on thinking.

Nothing's wrong, oh oh

Who's gonna drive you home

Tonight?

-Ric Ocasek

Q. Who's going to buy U.S. stocks?

A. Mom and Pop

A. Foreigners

The mavens and media got it all wrong.

Continue to focus on fundamentals and remember that the past is prologue when it comes to ‘American Exceptionalism’ and the U.S. stock market.

Today’s Session

After the big runup, anxiety is reentering the investment atmosphere.

ADP – Swing & Miss

The ADP jobs report has missed consensus for the second month in a row. Of course, the April miss didn’t matter for the BLS number which came in higher than the most optimistic estimate.

Still, there is no doubt the labor force is cooling down.

Small businesses are getting hit the hardest.

President Trump isn’t happy about this development, and the Fed’s reluctance to be less restrictive.

Tariff Update

Equity futures edged higher after this post (below) from President Trump on negotiating with President Xi.

Comments

Hey Charles, love the show and the daily updates. Fox is lacking again with closed caption either misinterpreting what is said or adding to what is said. Case in point, turn on closed caption and watch how many times the phrase "and going for" is added to the text and how many times the text just completely doesn't show up at all. Watching your show, Clayman, and Kudlow. Same on all. Please help those of us who can't hear well!! Thanks Kevin on 6/4/2025 4:29:54 PM

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