If you took yesterday off, you didn’t miss much on the surface of the session. But super exciting things happened as the Artificial Intelligence (AI) story continues to broaden.

Investors chose two paths: growth for those ready to rock and roll and quality for those who want to be in the mix but with fewer gyrations.

Technology Rocks!

The AI story continues to broaden to data centers and parts of the nation thought to be out of the Fourth Industrial Revolution loop.

Based in the great state of North Dakota, Applied Digital (APLD) revamped its model from a crypto mining play to an innovative data center play focused on liquid cooling and bespoke services.

The race is on to power the future.  

Heat Map

It was another day about growth stocks.

The PHLX Semiconductor Index (SOX) is up 6.0% this week and has made the kind of breakout worth chasing.

The Clark Kent of Technology

Broadcom (AVGO) must be the most underrated of all the $1.0 trillion stocks in the market. The stock is Superman disguised as Clark Kent.

The company reports after the close. It's made money in recent quarters.

Economic Data

The Beige Book went out yesterday. There were only moderate price hikes, but everyone braced for a surge.

‘Tariffs’ are mentioned 122 times in the report, up from 107 times for the April report.

ISM Services

The Services Purchasing Managers Index (PMI) came below the consensus and was in a contraction. Prices increased for the 96^th month in a row but at a faster pace.

Bond yields moved lower during the session, and there is a sense that the Fed will have to intervene sooner rather than later.

Betting markets continue to see a lower risk of a recession.

Meanwhile, despite the market's resolve, the Fear & Greed Index has returned to neutral.

Today’s Session

President Trump and President Xi spoke on the phone this morning. This is good news, as major decisions should be made sooner rather than later. As much as the establishment is rooting for China, they will have to make concessions.

Pulse of Economy

Economic data was released this morning, missing the Wall Street Consensus, which deepened the conversation and modeling about Federal Reserve rate cuts.

Some data is an adjustment to initial tariff reactions.

• Initial jobless claims were 247,000 vs. consensus of 235,000.

• Labor Productivity was -1.5 vs. consensus of -0.8.

• Trade deficit was -$61.6 billion vs. consensus of $67.6 billion.

The largest one-month decline on record. 

Comments

Alot of indicators moving in the right direction. If Trump can secure a few victories i.e. trade deals and the tax bill in the senate, we would have a strong wind at our backs......then what would be the doom and gloomers narrative? Fred Clauhs on 6/5/2025 9:20:18 AM

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