Good morning investors,
We kick off June with a fresh set of crosswinds. May delivered one of the strongest months in recent memory, driven by AI strength, resilient earnings, and cooling inflation. But the opening days of June are already testing that optimism. Tariff headlines are back. Trade tensions are rising. And investors now face the question: can momentum hold, or was May the exception, not the start of a trend?
Today’s price action will be shaped by fresh economic data, Fed commentary, and geopolitical headlines. Volatility may be back, but opportunity often travels in its wake.
Before the Bell
Futures are pointing lower to start the week. S&P 500 futures are down 0.3%, Nasdaq-100 off by 0.5%, and Dow futures lower by about 0.2%. The pullback comes as President Trump announced plans to double tariffs on imported steel and aluminum to 50%, reigniting global trade tensions. The dollar slipped, and gold climbed more than 1% on the move.
China struck back at U.S. accusations of trade violations, saying Washington failed to uphold its side of the Geneva truce. Meanwhile, Jerome Powell is scheduled to speak at 1pm today; a wildcard that could steer the session depending on tone and clarity.
Oil surged over 4% after OPEC+ decided to keep July’s output hike unchanged at 411,000 barrels per day. Steel stocks jumped sharply in premarket trading—Cleveland-Cliffs +32%, Steel Dynamics +13%, Nucor +13%—as the new tariff policy took center stage.
Technology Evolution
I'm initiating coverage on SoundHound AI Inc (NASDAQ: SOUN) with an Overweight rating and a $14 price target. This name is a direct play on the AI transformation theme I’ve consistently highlighted, and its real-time voice AI platform is already gaining traction across automotive, IoT, restaurant, and customer experience sectors.
The recent acquisition of Amelia expands SoundHound’s reach into the AI-powered contact center space—a market estimated to hit $30B by 2027. Their pivot to a recurring revenue model (forecasting 90% subscription-based income by 2027) is a clear positive for long-term margin expansion. While there are still challenges in the auto segment, SoundHound’s early-mover advantage is material. I see this as a niche leader emerging in one of AI’s most tangible verticals.
Corporate Framework
Sanofi headlines M&A activity with its $9.5B acquisition of Blueprint Medicines—Europe’s largest healthcare deal this year. On the IPO front, Chime Financial and Voyager Technologies are bringing momentum back to the new issue market with multi-billion-dollar targets.
Elsewhere, Tesla remains mired in internal tension after senior execs reportedly challenged Elon Musk’s public denial of the $25K EV cancellation. Alphabet will appeal a federal ruling over search dominance, Boeing is circling a mega-order with Air India, and Microsoft is putting $400M into Swiss AI infrastructure.
Strategic Outlook
Despite the May rally, I still expect a pullback in QQQ to its 200-day moving average. We saw the S&P 500 test and bounce from that key level—giving buyers renewed confidence—but the Nasdaq hasn’t yet followed. If it does, I believe buyers will lean in aggressively.
SPY support is now sitting near 575, with a trading range likely between that level and 600 unless a major headline disrupts the balance. I think we’ll see SPY drift down into the 580s this week and then bounce, provided Powell doesn’t upset the balance today.
On the macro front, the Fed is likely in wait-and-see mode. If the next inflation report confirms April’s cooler trend, I think a September rate cut becomes increasingly likely—and that’s the moment where we could see a breakout. Most portfolios are still underweight that outcome, which sets up the possibility for a broad, sustained move to the upside.
But it’s not just inflation. The other half of the Fed’s mandate, labor data, gets its test on Friday with the May jobs report. Markets are expecting 130,000 jobs added and unemployment holding at 4.2%. That’s well below the 25-year average of 5%, and a strong labor market with moderating inflation would create the ideal bullish setup.
What we don’t want is a 2008-style situation, where the Fed cuts because unemployment is rising. If we get policy easing because inflation is moderating and jobs remain solid, that’s the recipe for a proper leg higher in equities.
Individual Stocks
AppLovin (APP) is showing constructive action. The prior gap down was filled earlier this month and flipped into resistance—until it was broken cleanly on Friday. We saw a hammer tail bounce off the 9 EMA around $380, and I think there’s scope for a push toward the pivot high at $403. A break above there could spark short covering. That said, this setup only works if the broader SPY holds that key 575 level.
CrowdStrike (CRWD) also looks attractive, with flat-top resistance forming. A clean break here could set up a move to new all-time highs, again contingent on broader market strength. I’m watching the low-to-mid 450s for support. Snowflake (SNOW) also looks poised to push through the $210 level.
Final Thought
We remain range-bound for now—SPY 575 to 600 looks like the battleground—but the path forward is becoming clearer. In the short term, I favour a modest pullback in equities as the market digests trade volatility, Fed ambiguity, and macro data risk. But if inflation continues to cool and the labour market holds steady, the case for a September rate cut strengthens—and with it, the potential for a broad rally into year-end.
That’s the scenario markets aren’t yet fully pricing: a Fed easing cycle not born of crisis, but of control. If we get there, many underweight portfolios could be forced back into the market—and that’s when breakouts start to stick.
Please feel free to reach out to me on LinkedIn or by email if you would like help navigating this market environment or have any planning-related questions.
Dan Sheehan
This newsletter is for informational purposes only and should not be considered as investment advice. Please consult with your financial advisor about your specific situation. None of the individual equity analysis should be taken as a reason to buy or sell a security. Please consider your own risk tolerance situation, and consult a financial professional before trying to make a decision based on any information in this newsletter.