No-Advice Disclaimer: This analysis is for informational purposes only and not a recommendation to buy or sell any security.

Stock Market Outlook: June 7th  =
Uptrend

Author: J.Wenger ---- Published: June 07, 2026 ---- Last Updated: 2026-06-07
Disclosure: The author holds no material positions in the securities mentioned. See Editorial Policy & Disclosures for details.

Despite Friday's sell-off, the stock market outlook remains in an uptrend.

Oil, Energy, and Low Beta outperformed; Bitcoin, Technology, and High Beta underperformed.  Capital flowed out of the AI-trade on Friday, but employment, inflation and earnings growth continue to support asset prices.

TREND ANALYSIS

The S&P500 ( $SPX ) fell 2.6% last week.  The index is:
  • ~3% above the 50-day moving average
  • ~8% above the 200-day moving average
Friday's sell-off put a dent in the technical indicators used to identify trends remain bullish:
  • Average Directional Index: Bearish
    • Friday's sell-off created a cross-over
  • Institutional Activity: Bullish
    • The total number of distribution days sits at 5, which is elevated
      • The arrows for two May distribution days were missing (5/4 and 5/19) and have been re-added.
      • Two distribution days were added to the count, along with a stalling day on 5/29 when the indexes rebalanced.
    • Selling is not concentrated, and the May 4 distribution day drops out tomorrow, so the signal remains bullish for now
  • On-Balance Volume: Bullish
    • No change

Technical analysis chart of $SPX showing 6 months of candlesticks with 21-day, 50-day, and 200-day moving averages, volume with EMA(50), ADX(14) with +DI and -DI, and OBV with MA(62) through 2026-03-22.

Technical Analysis – $SPX – 2026-06-07

PERFORMANCE HIGHLIGHTS & COMPARISONS

Asset Classes

Oil ( $USO ) ended the with the only gain.  Bitcoin ( $IBIT ) was absolutely crushed.  Not surprisingly, the cryptocurrency also fell to bearish trend, along with US bonds ( $IEF ).  Emerging Market Bonds ( $PCY ) weakened to neutral and the U.S. Dollar reclaimed bullish bias.

Performance comparison of major asset class ETFs ($USO, $IBIT, $GLD, $SPY, $VEA, $EEM, $IEF, $BNDX, $PCY, $DXY) showing 1-week, 4-week, and bias-shift returns relative to the U.S. Dollar.

Asset Class Performance vs. U.S. Dollar – 2026-06-07

S&P500 Sectors

Energy and Healthcare ( $XLE, $XLV ) led sectors higher, and it was Technology ( $XLK ) leading to the downside for a change.  Communications did an about face and dropped to bearish bias.  Consumer Discretionary, Consumer Staples, and Industrials all met in neutral territory.

Performance comparison of S&P500 sector ETFs ($XLC, $XLY, $XLP, $XLE, $XLF, $XLV, $XLI, $XLB, $XLRE, $XLK, $XLU, $SPY) showing 1-week, 4-week, and bias-shift returns.

S&P500 Sector Performance – 2026-06-07

S&P500 Investing Styles

No surprise in style performance:  Low Beta ( $SPLV ) was the best, High Beta the worst ( $SPHB ).  High Dividend ( $SPHD ) moved back to bullish bias.  Low Beta and Defensives ( $SPLV, $POWA ) returned to neutral.

Performance comparison of investment style ETFs ($SPHB, $SPLV, $IWO, $IJH, $IWF, $OEF, $IWN, $IJJ, $IWX, $MTUM, $QUAL, $SPHD, $POWA, $SPY) showing 1-week, 4-week, and bias-shift returns.

Style Performance vs. S&P500 – 2026-06-07

COMMENTARY

Markets

Oof.  The tech sector took it on the chin last week, as capital flows rotated out of AI-related companies.  It wasn't ALL bad though:  the tables above show several sectors doing fairly well despite Friday's drop.  In fact, FactSet compiled statistics from the latest earnings cycle that supports this move, showing non-tech, cyclical sectors like industrials, financials, and materials exceeding 20% earnings growth.  Even with Friday's sell-off, U.S. equities have been largely immune to the macroeconomic and geopolitical headwinds...so far at least.

Macroeconomic Data and Policy

ISM Manufacturing PMI increased slightly in May, though the level did indicate the strongest expansion in 4 years.  ISM Services PMI also increased in May.

Job openings (JOLTS) increased in April, reaching the highest level since November 2024.  ADP data showed private businesses added jobs in May 2026, which aligned with the blowout NFP data released Friday.  The US economy added 172K jobs in May, more than double the forecasts, and April was revised higher by more than 50%.  The strong employment data, along with higher inflation, has many dropping expectations for rate cuts this year.

Geopolitics

Peace efforts in West Asia stalled out again, with the U.S. and Iran renewing military strikes.  Israel launched ground operations and airstrikes against Hezbollah in southern Lebanon, drawing the ire of Iran.

The Trump administration discussed plans for new import tariffs (~10%) on major trading partners, using Section 301 of the Trade Act of 1974 to make the measures legally resilient.

EYES ON THE HORIZON

It's employment week in macro land, alongside the latest PMI data.
  • Monday: --
  • Tuesday: Existing Home Sales
  • Wednesday: CPI
  • Thursday: PPI
  • Friday: UofM Consumer Sentiment

Best to Your Week!

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

Share this post on social media:

Facebook (@InvestSafely)
X / Twitter (@investsafely)
LinkedIn (@Invest-Safely)
Instagram (@investsafely)

Content Sources: Bloomberg, CNBC, Federal Reserve Bank of St. Louis (FRED), Hedgeye, StockCharts.com, TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics.
Price and Volume charts provided courtesy of stockcharts.com.

Performance Methodology: All sector performance data is sourced from ThinkorSwim and reflects price‑only returns calculated using end‑of‑week closing data. Bias classifications follow a proprietary Invest Safely, LLC model and update only when trend conditions meet predefined thresholds. All calculations are consistent across every chart on this page.

Disclaimer: Invest Safely, LLC is an independent investment research and online financial media company. Use of Invest Safely, LLC and any products available through Invest‑Safely.com is subject to our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security.

Looking for more information on the Stock Market Outlook Signals? You'll find it here:



If you're interested in learning more about the relationship between price and volume, or how to find and trade the best stocks for your growth strategy, check out this book via the following Amazon affiliate link:

How to Make Money in Stocks: A Winning System in Good Times and Bad.

It's one of my favorites.

In the past, I reviewed 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.

For historical Elliott Wave commentary and analysis, go to ELLIOTT WAVE lives on by Tony Caldaro.

IMPORTANT DISCLOSURE INFORMATION
This material is for general communication and is provided for informational and/or educational purposes only. None of the content should be viewed as a suggestion that you take or refrain from taking any action nor as a recommendation for any specific investment product, strategy, or other such purpose. Certain information contained herein has been obtained from third-party sources believed to be reliable, but we cannot guarantee its accuracy or completeness.
To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisors of his/her choosing. Invest Safely, LLC is not a law firm, certified public accounting firm, or registered investment advisor and no portion of its content should be construed as legal, accounting, or investment advice.
The material is not to be construed as an offer or a recommendation to buy or sell a security nor is it to be construed as investment advice. Additionally, the material accessible through this website does not constitute a representation that the investments described herein are suitable or appropriate for any person.
Hypothetical Presentations:
Any referenced performance is “as calculated” using the referenced funds and has not been independently verified. This presentation does not discuss, directly or indirectly, the amount of the profits or losses, realized or unrealized, by any reader or contributor, from any specific funds or securities.
The author and/or any reader may have experienced materially different performance based upon various factors during the corresponding time periods. To the extent that any portion of the content reflects hypothetical results that were achieved by means of the retroactive application of a back-tested model, such results have inherent limitations, including:
Model results do not reflect the results of actual trading using assets, but were achieved by means of the retroactive application of the referenced models, certain aspects of which may have been designed with the benefit of hindsight
Back-tested performance may not reflect the impact that any material market or economic factors might have had on the use of a trading model if the model had been used during the period to actually manage assets
Actual investment results during the corresponding time periods may have been materially different from those portrayed in the model
Past performance may not be indicative of future results. Therefore, no one should assume that future performance will be profitable, or equal to any corresponding historical index.
The S&P 500 Composite Total Return Index (the "S&P") is a market capitalization-weighted index of 500 widely held stocks often used as a proxy for the stock market. Standard & Poor's chooses the member companies for the S&P based on market size, liquidity, and industry group representation. Included are the common stocks of industrial, financial, utility, and transportation companies. The S&P is not an index into which an investor can directly invest. The historical S&P performance results (and those of all other indices) are provided exclusively for comparison purposes only, so as to provide general comparative information to assist an individual in determining whether the performance of a specific portfolio or model meets, or continues to meet investment objective(s). The model and indices performance results do not reflect the impact of taxes.

Investing involves risk (even the “safe” kind)! Past performance does not guarantee or indicate future results. Different types of investments involve varying degrees of underlying risk. Therefore, do not assume that future performance of any specific investment or investment strategy be suitable for your portfolio or individual situation, will be profitable, equal any historical performance level(s), or prove successful (including the investments and/or investment strategies describe on this site).