• Markets drop as strong jobs data shift rate expectations - Stocks and bonds moved sharply lower today after a stronger-than-expected jobs report pushed rate expectations and bond yields higher. Technology weakness from the prior session carried over, with the Nasdaq 100 falling 4% and the semiconductor index declining nearly 9%. Overseas, South Korea’s equity index, which has doubled this year and includes Samsung as a major constituent, closed down 5.5%. Defensive areas of the market held up better, with consumer staples and other defensive sectors finishing higher and providing a partial offset to the tech-led weakness. The Dow was more resilient, posting only a modest weekly loss, while the S&P 500’s historic nine-week winning streak came to an end. Elsewhere, oil prices fell 3% on the day, while the 10-year Treasury yield rose to 4.54%.
   
• Blowout jobs report pushes rates higher - The U.S. economy added 172,000 jobs in May, well above expectations of 90,000, while the unemployment rate held steady at 4.3%. Revisions to the prior two months were also positive, adding a combined 93,000 jobs. Job gains were broad-based, led by leisure and hospitality and healthcare. Taken together, today’s report helps reinforce other indicators suggesting the labor market has strengthened this year after a weak 2025. While this acceleration is positive for the economy, it also makes less of a case for the Fed to cut interest rates. Markets reacted accordingly, with stocks extending their pullback and bond yields moving higher as investors increasingly price in the possibility of one additional Fed rate hike by year-end. Encouragingly, there is still no evidence of a wage-price spiral. Average hourly earnings rose 3.4%, in line with expectations and down from the prior month’s 3.6% pace. In our view, the Fed is likely to remove its easing bias at its meeting in two weeks, while maintaining a patient stance as it assesses whether inflation peaks this quarter before responding to any energy-driven price pressures.
   
• Market leadership broadens as tech rally goes in reverse - After a strong multi-week run in the technology sector, led by AI-related companies, investors have turned more cautious over the past two days. The semiconductor index, which had rallied roughly 50% since April, is now pulling back after Broadcom’s chip sales outlook fell short of elevated expectations, triggering profit-taking in the U.S. and global markets. Encouragingly, as tech takes a breather to digest recent gains, other sectors have begun to lead, resulting in broader market participation. Before today's drop, both the Dow Jones Industrial Average and the equal-weight S&P 500 reached fresh highs, reflecting this shift. We view this rotation as a healthy development that supports the durability of the current bull market. We expect this trend to continue in the near term, particularly if progress is made toward reopening the Strait of Hormuz, which could help ease pressure on oil prices and bond yields.

Angelo Kourkafas, CFA;
Investment Strategy

^{Source for all data: Bloomberg.} 

• Markets close higher as sector performance broadens - Equity markets finished higher on Thursday, with the Dow Jones Industrial Average reaching a record high. Strength in health care, financials and communication services offset weakness in technology stocks, where semiconductor manufacturer Broadcom weighed on the sector. Broadcom shares fell about 13% after the company reported fiscal second-quarter revenue that came in slightly below expectations and left its AI chip outlook unchanged. The disappointment appeared to spill over into other semiconductor and AI-related companies. Bond yields declined, with the 10-year U.S. Treasury yield at 4.47%. Internationally, Asian markets finished mostly lower overnight, while Europe advanced. In energy markets, WTI oil prices pulled back, likely reflecting cautious optimism around U.S.-Iran diplomatic talks and the potential for reduced geopolitical risk. Meanwhile, the U.S. dollar was modestly lower against major currencies but has remained largely rangebound recently.
   
• Jobless claims edge higher but remain consistent with a stable labor market – Initial jobless claims rose to 225,000 last week, above the consensus estimate of 211,000. While the increase bears watching, the reading remains low by historical standards and well below the 20-year average of roughly 365,000. Continuing claims, which reflect the total number of people receiving benefits, declined to 1.78 million, suggesting displaced workers are finding new employment. Taken together, the data remain broadly consistent with other recent indicators pointing to a stable labor market. Friday's employment report should provide additional insight, with consensus estimates calling for 105,000 job gains in May, enough to keep the unemployment rate steady at 4.3%.
   
• Productivity slows, but labor costs contained – Nonfarm business sector productivity, which measures output per hour worked, was revised down to a 0.3% annualized gain for the first quarter of 2026. This compares to expectations to remain unchanged from the preliminary reading of 0.8%. While productivity slowed in the first quarter, we believe AI adoption could help drive improvements over time. Hourly compensation rose 2.1% year-over-year, providing growing disposable income that should help support consumer spending and the broader economy. Unit labor costs, which measure wage gains adjusted for changes in productivity, increased 1.8% annualized, below expectations for a 2.3% gain. In our view, the softer unit labor cost reading is encouraging from an inflation perspective, as it suggests wage-related cost pressures remain contained.

Brian Therien, CFA;
Investment Strategy

^{Source for all data: FactSet.} 

• Stocks in risk-off mode —U.S. equity markets were lower on Wednesday after a nine-day winning streak for the S&P 500. The S&P fell about 0.7%, the technology-heavy Nasdaq fell about 0.9%, and Dow Jones was down about 1.2%. This comes as oil prices moved higher and U.S. bond yields climbed as well, dampening market sentiment. From a sector-leadership perspective, energy and consumer staples led the gains, while the technology and financials sectors lagged. U.S. small-cap stocks also underperformed on Wednesday, as uncertainty around U.S.-Iran negotiations and elevated oil prices likely weighed on the outlook for smaller companies. Overall, after a nice rally in U.S. and global equities, we would expect some periods of volatility as investors digest recent gains. However, keep in mind that, historically, the period after U.S. midterm elections tends to be favorable for equity investors.
   
• Inflation remains uncomfortably elevated in Q1 — In last week's first-quarter GDP data, inflation saw a notable move higher. The personal spending deflator, the Fed's preferred measure of inflation, spiked to 3.5% over the first quarter as a whole. Worse, monthly data showed that this jumped even further in April, to 3.8%, and we expect another nudge higher in May. Some of this is an oil story, as gas prices push inflation higher. However, excluding energy prices, inflation was running at 3.3% in April, well above the Fed's target for 2%. Scratching further beneath the surface, core goods prices are running unusually hot at 2.8%, while core services inflation remains elevated at 3.5%. These data put the Fed in a tough spot, and it is interesting to see markets continue to price a hike within the next year, even as risk around oil prices seemingly ease. We think the bar for raising rates remains high, and we don't expect tighter policy unless we see signs of a further pick-up in price growth, particularly on the core side. Instead, we expect the central bank to stay on hold absent any growth scare. Bottom line, in our view: While bond yields have fallen from their highs, further material progress will likely be challenging in an environment of elevated inflation and solid growth.
   
• Employment data takes center stage — Labor-market data will be in focus for investors this week, beginning with Tuesday's JOLTS job openings release for April. Job openings rose to 7.6 million— the highest level since May 2024 — and signaling steady demand for labor, in our view. The ADP private employment report for May also pointed to steady gains, with 122,000 jobs added, versus forecasts for 120,000. The main event will be Friday’s nonfarm-payrolls and unemployment-rate data for May. Economists expect the recent trend of steady job growth and limited layoffs to have persisted, with nonfarm payrolls projected to rise by 100,000 and the unemployment rate holding at 4.3%. So far in 2026, job growth has stabilized, with payrolls averaging monthly gains of 76,000—an improvement from roughly 10,000 per month in 2025. Signs of firing also remain limited. The unemployment rate has held steady at 4.3% for two consecutive months and has been below 5% since 2021. Other measures of layoffs are similarly contained, with initial jobless claims averaging 211,000 this year versus a 30-year average above 300,000. We continue to view 2026 as a year of modest nonfarm-payroll growth—likely in the 50,000 to 100,000 range per month—alongside restrained layoffs, keeping the unemployment rate relatively stable. The key takeaway, in our view, is that steady labor-market conditions should continue to support healthy consumer spending and broader economic activity through the remainder of the year.

Mona Mahajan;
Investment Strategy

^{Source for all data: FactSet.} 

• Stocks close higher with key labor-market data on the horizon —U.S. equity markets finished higher on Tuesday, as investors focused on a busy week of labor-market data. April JOLTS job openings came in well above expectations, rising to 7.6 million — the highest level since May 2024 — and signaling steady demand for labor, in our view. Attention now turns to Friday’s employment report, which will provide an update on nonfarm-payroll growth and the unemployment rate. From a market-leadership perspective, most S&P 500 sectors closed higher, with cyclical areas such as materials, energy and industrials among the top performers. Communication services was the notable laggard, weighed down by shares of Alphabet following the company’s announcement that it plans to raise $80 billion through an equity offering to support AI-related investments. U.S. small-cap stocks also stood out, outperforming likely on the upbeat job-openings data, in our view, with the Russell 2000 rising 0.9%. In bond markets, Treasury yields were little changed, with the 10-year Treasury yield closing at 4.45% and the 2-year yield at 4.05%. Oil prices edged higher, with WTI crude closing around $94 per barrel, as uncertainty remains around the path forward for U.S.-Iran negotiations.
   
• Stocks rallied through May—what does history suggest lies ahead? — U.S. equities posted strong gains over the first five months of 2026, as resilient economic data and solid corporate profit growth outweighed the headwinds from higher oil prices and geopolitical uncertainty. The S&P 500 Price Index rose 10.7% through May, marking the strongest start to a year since 2021. Since 1970, there have been 14 instances in which the S&P 500 gained 10% or more over the first five months of the year.* In those cases, the index delivered an average return of 7.2% over the remainder of the year, with positive returns in 11 of 14 instances (79%).* Looking at the five most recent occurrences (2024, 2021, 2013, 1998, and 1997), equities went on to gain an average of 13.1%, with returns positive in each case from June through December.* While there's no guarantee history will repeat itself in 2026, we believe a solid fundamental backdrop—supported by strong profit growth, steady economic activity, and stable labor-market conditions—provides a constructive environment for equities over the remainder of the year.
   
• Employment data takes center stage — Labor-market data will be in focus for investors this week, beginning with today's JOLTS job openings release for April. Job openings rose to 7.6 million— the highest level since May 2024 — and signaling steady demand for labor, in our view. The ADP private employment report for May follows tomorrow, while the main event will be Friday’s nonfarm-payrolls and unemployment-rate data for May. Economists expect the recent trend of steady job growth and limited layoffs to have persisted, with nonfarm payrolls projected to rise by 100,000 and the unemployment rate holding at 4.3%. So far in 2026, job growth has stabilized, with payrolls averaging monthly gains of 76,000—an improvement from roughly 10,000 per month in 2025. Signs of firing also remain limited. The unemployment rate has held steady at 4.3% for two consecutive months and has been below 5% since 2021. Other measures of layoffs are similarly contained, with initial jobless claims averaging 211,000 this year versus a 30-year average above 300,000. We continue to view 2026 as a year of modest nonfarm-payroll growth—likely in the 50,000–100,000 range per month—alongside restrained layoffs, keeping the unemployment rate relatively stable. The key takeaway, in our view, is that steady labor-market conditions should continue to support healthy consumer spending and broader economic activity through the remainder of the year.

Brock Weimer, CFA;
Investment Strategy

^{Source for all data not cited: FactSet. 
Source for all data cited: *FactSet, Edward Jones. S&P 500 Price Index.} 

• Tech rally leads markets higher despite geopolitical uncertainty — U.S. equity markets closed higher on Monday, despite uncertainty surrounding the path forward for U.S.–Iran negotiations, as well as reports that the U.S. struck Iranian radar and drone sites over the weekend. Despite the geopolitical flare-up, a surge in the technology sector drove gains across all three major U.S. indices. The rally in tech shares was fueled by NVIDIA’s unveiling of a new semiconductor chip designed for personal laptops. Outside of technology, energy was the only other S&P 500 sector to finish higher on Monday. Overseas, European markets were mostly lower, while Asian equities moved higher overnight, led by South Korea’s KOSPI Index, which gained more than 3% amid continued strength in global technology shares. Oil prices also closed higher, with WTI crude rising to $92 per barrel. Treasury yields increased alongside heightened geopolitical uncertainty, with the 10-year yield climbing to 4.46%.
   
• Markets are back at all-time highs. Can the rally continue? — Equity markets have staged an impressive rebound following the March pullback, with the S&P 500 gaining roughly 20%, including dividends, since March 30, while the technology-heavy Nasdaq has advanced nearly 30%. Strong technology earnings and a de-escalation in the war with Iran have been the primary catalysts behind the rally, supporting investor risk appetite over the past two months. Historical seasonality trends suggest the momentum could continue into June. Since 1970, the S&P 500 has generated an average June return of 0.5%, with positive returns occurring 61% of the time.* While those results are not meaningfully stronger than the average month, seasonal trends have been particularly favorable in recent years. Since 2015, the index has gained an average of 1.5% in June, with positive returns in 82% of those years.* That momentum has also tended to carry into July, as the S&P 500 has averaged a 3.2% gain and posted positive returns in every July since 2015.* While there's no promise history will repeat itself this year, we continue to believe the fundamental backdrop for equities remains supportive. Steady economic activity and resilient earnings growth should continue to provide a constructive environment for equity markets, in our view.
   
• May performance recap — Equity markets built on April’s strong momentum in May, with the S&P 500 posting its ninth consecutive weekly gain last Friday and returning 5.3% for the month, including dividends. Investor sentiment was supported by strong corporate earnings growth and expectations for a diplomatic resolution to the war in Iran, which helped drive oil prices lower during the month. From a leadership perspective, the technology sector led the way, gaining 16% in May following strong first-quarter earnings results and continued robust demand for AI-related investment. However, strength in equities was not limited to the U.S. Emerging-market equities gained nearly 10%, led by technology-heavy regions such as Taiwan and Korea, which also continue to benefit from ongoing AI-driven semiconductor spending. International developed large-cap stocks — primarily companies in Europe and Japan — also moved higher, gaining more than 3% for the month and benefiting from lower oil prices. Despite the volatility experienced in March and continued geopolitical uncertainty, each of our recommended equity asset classes has returned more than 9% year to date. Given the sharp rebound from the March lows, we believe a period of consolidation would be normal. Even so, the fundamental backdrop for equities remains constructive in our view, supported by strong corporate profit growth, healthy economic activity, and stable labor-market conditions.

Brock Weimer, CFA;
Investment Strategy

^{Source: FactSet. 
*FactSet, Edward Jones. S&P 500 Price Index.}