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ETFsector.com Daily Trading Outlook

June 2, 2025

S&P futures are down 0.6% in early Monday trading following a strong May, with the S&P 500 gaining over 6%—its best May since 1997—while the Mag 7 ETF surged nearly 14%. U.S. equities closed higher last week with the major indices up over 1%. Overnight, Asian markets declined (Japan and Taiwan led losses; China was closed), and European indices are off ~0.5%. Treasuries are weaker with the curve bear steepening; long-end yields up 5–6 bp. The dollar index is down 0.6%, gold is up 1.8%, Bitcoin futures down 0.3%, and WTI crude is up 3.6% on limited OPEC+ output increases and rising geopolitical tensions.

Trade remains a key market overhang as President Trump announced plans to double tariffs on imported steel and aluminum to 50%. U.S.-China relations are under strain with mutual accusations of violating the recent Geneva agreement, though a Trump-Xi call remains possible. U.S. Defense Secretary Hegseth warned of imminent threats against Taiwan, further escalating tensions. Meanwhile, the Senate continues to push back on the reconciliation bill, with deficit concerns gaining traction.

On the Fed front, Waller expects tariff-driven inflation to be transitory and still sees rate cuts later this year. Politico reported that SLR reform may be coming to support Treasury markets. OPEC+ approved a third monthly output hike, largely in line with expectations.

Today’s U.S. economic calendar includes May ISM manufacturing and April construction spending. Fed speakers include Logan (10:15am), Goolsbee (12:45pm), and Powell (1:00pm), who will open a Fed conference.

Corporate Headlines:

  • META is reportedly deploying AI to assess privacy risks across its platforms.
  • GOOGL’s Waymo was highlighted as the autonomous driving leader, ahead of TSLA.
  • DELL and CDW are under federal scrutiny as the government seeks tech cost savings.
  • TGT may require more drastic steps in its turnaround, per media reports.
  • BA CEO said a 737 Max replacement is not an immediate priority.
  • MRNA received limited U.S. approval for a new COVID vaccine.
  • HIMS will cut ~4% of staff in response to a U.S. ban on compounded weight-loss drugs.

 

U.S. equities ended Friday mostly lower (Dow +0.13%, S&P 500 -0.01%, Nasdaq -0.32%, Russell 2000 -0.41%) but finished May with modest weekly gains and their strongest monthly performance since November 2023. Market sentiment was supported by largely in-line inflation data but tempered by weaker-than-expected spending figures and renewed trade tensions with China.

April’s core Personal Consumption Expenditures (PCE) index rose 0.1% month-over-month and 2.5% year-over-year, in line with expectations and marking a new post-2021 low. Headline PCE also increased 0.1% from March and 2.1% year-over-year, just shy of the 2.2% forecast. Personal income surged by 0.8%, well above the 0.4% consensus, aided in part by Social Security adjustments. However, personal spending rose just 0.2%, missing the 0.4% forecast and slowing from March’s 0.7%. Analysts noted that April’s data reflects only the early stages of the administration’s new tariff policy, with the full impact expected later in the summer as inventories deplete.

Consumer sentiment improved modestly in May, with the University of Michigan’s final reading at 52.2, unchanged from April but above the preliminary reading of 51.8. A notable driver was the moderation in inflation expectations: 1-year expectations dropped to 6.6% from 7.3%, and 5-year expectations eased to 4.2% from 4.6%. Despite this, the Current Conditions Index declined slightly to 58.9, while the Expectations Index ticked up to 47.9, reflecting lingering consumer unease about the economic outlook.

Manufacturing data disappointed, as the May Chicago PMI fell to 40.5, well below consensus and marking the lowest reading since January. This was the 18th consecutive sub-50 reading, reinforcing concerns about continued contraction in regional manufacturing activity.

Geopolitically, U.S.-China trade tensions re-intensified after President Trump accused China of violating a tariff reprieve deal via a Truth Social post. The White House is preparing to extend sanctions to subsidiaries of targeted Chinese tech firms through a new “subsidiary rule” expected in June. The administration is also considering shifting its legal basis for tariffs from the International Emergency Economic Powers Act (IEEPA)—which faced a court challenge—to Sections 122 and 301 of the Trade Act of 1974, potentially giving it a firmer legal footing. While the federal appeals court temporarily stayed the earlier ruling that blocked IEEPA-based tariffs, analysts expect any alternative approach to face its own legal hurdles.

Treasury Secretary Bessent confirmed that trade talks with China are “a bit stalled,” though a potential Trump-Xi call could revive momentum. The EU, meanwhile, sees an opportunity to push for mutual tariff reductions after the U.S. court decision, but negotiations remain difficult due to disagreements over non-tariff barriers and tax policies.

In markets, Treasuries firmed with a steepening yield curve, while the dollar index rose 0.1%. Bitcoin futures fell 1.2%, gold declined 0.9%, and WTI crude settled 0.2% lower ahead of this weekend’s OPEC+ meeting.

S&P 500 Sector Performance:
Outperformers included Consumer Staples (+1.16%), Utilities (+1.08%), Communication Services (+0.49%), Healthcare (+0.25%), Financials (+0.20%), Real Estate (+0.13%), Materials (+0.12%), and Industrials (+0.11%). Laggards were Energy (-0.68%), Consumer Discretionary (-0.58%), and Information Technology (-0.43%).

Company Highlights

Consumer Staples

COST +3.1% – Costco’s FQ3 results modestly beat consensus. Gross margins excluding membership were strong, and analysts cited strategic pricing, tariff mitigation, and membership growth as key positives.
ULTA +11.8% – Ulta Beauty delivered a Q1 beat on earnings, sales, and margins. It raised full-year guidance, citing market share gains across prestige and mass categories, improved brand engagement, and makeup demand recovery.

Communication Services

SATS -12.1% – EchoStar dropped after skipping a $326M interest payment on senior secured notes. It cited an ongoing FCC review and enters a 30-day grace period.

Healthcare

COO -14.6% – Cooper Companies topped Q2 earnings expectations but cut full-year organic growth guidance due to weakness in its fertility segment and a more cautious outlook for contact lenses.
DXCM +1.1% – Dexcom was initiated at Buy by Goldman Sachs, which highlighted underappreciated consumer adoption potential and upside to gross margins.

Financials

AMBA -15.1% – Ambarella beat on earnings and raised FY26 guidance, but commentary on lingering tariff uncertainty and weak auto sales weighed on shares. The broader energy sector underperformed ahead of the weekend’s OPEC+ meeting.

Materials

ESTC -12.1% – Elastic’s Q4 earnings and revenue beat were overshadowed by a light FY26 revenue guide, prompting some analyst skepticism.
RGTI -7.9% – Rigetti fell after entering an agreement to sell up to $350M in common stock on the open market.

Consumer Discretionary

GAP -20.2% – Despite a Q1 beat and reaffirmed full-year guidance, Gap warned that ongoing tariffs could cost $250M–$300M this year, spooking investors.
AEO (not listed among top movers) also struggled after pulling FY guidance earlier in the month and offering a weak Q2 outlook.

Information Technology

PD -11.4% – PagerDuty beat Q1 expectations, but billings fell short and Q2 EPS guidance was below consensus. The company also lowered its FY revenue guide, citing enterprise client downgrades.

ZS +9.8% – Zscaler outperformed with FQ3 earnings, FCF, and revenue all above expectations. The company raised FY25 guidance and named Kevin Rubin as its new CFO.
PLTR +7.7% – Palantir rose after reports that its U.S. government business expanded to more federal agencies, using Foundry to compile data on U.S. citizens.

MRVL -5.6% – Marvell posted in-line Q1 results but disappointed with flat guidance for its Data Center segment and soft gross margin forecasts.
U +9.7% – Unity Software was upgraded to Buy at Jefferies, which cited optimism for revenue acceleration in FY26 from its improved ad tech platform.
PATH +2.9% – UiPath posted solid Q1 results and raised guidance. Analysts noted strong license revenue, customer retention, and free cash flow trends.

 

 

Eco Data Releases | Monday June 2nd, 2025

 

S&P 500 Constituent Earnings Announcements | Monday June 2nd, 2025

 

Data sourced from FactSet Research Systems Inc.

Patrick Torbert

Editor | Chief Strategist

Patrick Torbert is a veteran financial market analyst who is currently the Editor and Chief at ETF Insight a NY based full-service content, TV, video podcast and digital marketing firm that represents several ETF issuers. Patrick brings 20+ years of experience from Fidelity Asset Management where he most recently served as an equity and multi-asset analyst.
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