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Stock Market Outlook
For The Week Of June 1st = Uptrend

INDICATORS

    ADX Directional Indicators: Uptrend
    Institutional Activity (Price & Volume): Uptrend
    On Balance Volume Indicator: Uptrend

ANALYSIS

The stock market outlook stays in an uptrend, after equities found support at the 200-day moving average and rallied out of the Memorial Day weekend.

The S&P500 ( $SPX ) gained 1.9% last week.  The index sits ~5% above the 50-day moving average and ~2% above the 200-day moving average.

Technical analysis of daily SPX prices

SPX Technical Analysis - June 1 2025

The ADX, Institutional Activity, and On-Balance Volume are all in bullish territory.

Weekly price performance of S&P500 sector ETFs

Real Estate ( $XLRE ) led sectors higher last week, and bounced back to bullish bias after testing a change last week.  Energy ( $XLE ) was the worst performer.

Weekly price performance by sector style

All sector styles gained last week, with Momentum ( $MTUM ) leading the way and  Defensive ( $POWA ) bringing up the rear.  High Dividend ( $SPHD ) improved to neutral bias.

Weekly price performance by asset class

Stocks and Bonds ( $SPY & $IEF ) were the winning plays, while Bitcoin ( $IBIT ) ran into some liquidation flows and dropped 6%. Bonds ( $IEF ) moved from bearish to neutral bias.

COMMENTARY

After Tuesday's opening rally, equities didn't make much progress and suffered from a lot of intraday volatility.  Macro data was in-line with expectations, and NVIDIA earnings were well received.

After rising more than 7% in March on tariff front-running, Durable Goods Orders fell 6% in April.  No surprise here.

Last month's FOMC minutes were released Wednesday.  Participants felt tariff increases were significantly larger and more extensive than anticipated, and noted a high level of  uncertainty around trade policy and resulting impacts to the economy.  That said, they feel they're well positioned, choosing to wait for more clarity from inflation and labor data.

As for the Federal Reserves favored inflation measure, both Headline and Core PCE fell 20 basis points year over year, inching closer to the Feds 2% target.

Finally, the second GDP revision was revised higher by 10 bps, but still negative Q1.

This week, ISM Manufacturing and Services PMIs, JOLTS, and non-farm payroll data are released.

Typically, late May to early June is a strong period for equities, then performance wanes as we close out the month.  Headline volatility remains a risk, with markets hyper-fixated on tariff news.  Key levels to watch are the prior all time highs from February and the gaps in price action from April and May.

Best to Your Week!

P.S. If you find this research helpful, please tell a friend.
If you don't, tell an enemy.

Sources: Bloomberg, CNBC, Federal Reserve Bank of St. Louis, Hedgeye, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics



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Once a year, I review the market outlook signals as if they were a mechanical trading system, while pointing out issues and making adjustments. The goal is to give you to give you an example of how to analyze and continuously improve your own systems.

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