Stock Market Outlook: June 7th = Uptrend
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
- The total number of distribution days sits at 5, which is elevated
- On-Balance Volume: Bullish
- No change
SPX Price & Volume Chart – 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.
Asset Class Performance – 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.
S&P 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.
Sector Style Performance – 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 & 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
Inflation datasets (Consumer and Producer Price index) drop later this week.
- Monday: —
- Tuesday: Existing Home Sales
- Wednesday: CPI
- Thursday: PPI
- Friday: UofM Consumer Sentiment
Best to Your Week!
The Safe Investing Blog 