June 6, 2026

Major averages picked up the month of June where they left off in May, with the S&P 500 scoring a fresh record and extending its winning streak to eight consecutive sessions. Rising crude oil prices lifted energy names following the weekend ramp in Israeli-Hezbollah hostilities; however, broader risk sentiment was buoyed by President Trump’s de-escalatory remarks. 

Topics of the week: 

  • AI investment is a major tailwind: Ongoing AI spending and productivity gains could meaningfully boost future earnings.

  • Earnings growth outlook is strong: It would not be a surprise to see S&P 500 earnings per share in the neighborhood of $320 in 2026 and over $350 in 2027, supporting the potential for further upside.

What we are watching:

  • Heavy AI spending is pressuring cash flow: Large capital investments are reducing free cash flow yields, making stocks appear more expensive in the near-term.

  • High expectations are already priced in: Optimism around growth and AI development leaves little margin for error should they not come through. 

 

Index Data & Market Performance 

 

Data as of Market Close  5.26.26 

source: gemini.google.com*

In Focus

The major market-moving economic reports being released this week are heavily focused on the U.S. labor market and service sectors. SpaceX is officially conducting its roadshow this week, targeting a historic $1.75 trillion to $2 trillion valuation under the Nasdaq ticker SPCX. Interest in the IPO space has skyrocketed in the lead-up to the public listing of SpaceX. And for good reason. SpaceX is looking to raise as much as $75 billion in what is expected to be the largest IPO ever. 

Monday – Construction Spending

Tuesday –  JOLTS (Job Openings and Labor Turnover Survey)

Wednesday – ADP Employment Change

Thursday – Initial Jobless Claims

Friday – BLS Employment Situation Report (Nonfarm Payrolls)

 

What's Trending: Special Edition - Talking Tech 

In this week's news section, we feature insights from our Chief Investment Officer, David Meier. David provides an informative analysis of current market trends and forecasts, drawing on his extensive experience and thorough research to deliver a well-rounded perspective on the market landscape.

Technology stocks started 2026 on the back foot as investors began to take profits and rotated into cheaper parts of the market that had been left behind. This was later amplified by rising geopolitical tensions and concerns about broad AI disruption.  Fast forward 5 months, and that trend has sharply reversed.  Technology stocks have been in the driver’s seat, rising 48% since the end of the first quarter and outpacing the S&P500 by over 30%. 

What Has Changed, and Can We Trust This Rally?

There have been two key developments this quarter:

1) Earnings season was much stronger than expected, and company earnings are one of the most reliable predictors of future stock prices.  Coming into Q1 reports, the average company was expected to grow their earnings ~13% over the first quarter of last year.  Instead, we saw the average number rise to ~26%, largely driven by technology companies.

2) As agentic AI has progressed, it has become clear that more equipment will be required than previously thought.  Agentic AI can be summarized as the transition from simply answering a question like “what are the best vacation destinations in January?” to using AI to operate on your behalf to book your entire vacation.  JPMorgan highlights this phenomenon below, showing the sharp increase in prices for memory chips, a key enabler of agentic technology.  These price increases have led to higher profits.

 

Our Approach

At JWM, we have taken a long-term, disciplined view, with select bets in high-quality technology stocks and a focus on managing risk.  These developments are very exciting, and there is no doubt artificial intelligence will be transformational – our goal is to participate responsibly. 

Author: David Meier, OCIO Services Consultant

In his role as an OCIO Services Consultant at LPL Financial, David supports Johlfs Wealth Management as the Chief Investment Officer where he provides economic insights and deep experience in the development of Johlfs Wealth Management’s investment philosophy and strategy. He works closely with the firm’s advisors to structure tailored investment strategies that align with clients’ financial goals and risk tolerance.

 

 

Disclosures

*The data for the total returns of the S&P 500, Dow Jones 30, and NASDAQ Composite are compiled and published by several financial news outlets, index providers, and government/academic sources.

Based on typical financial data providers and the search results, here are the likely sources for this data:

  • S&P Dow Jones Indices (S&P Global): This is the official index calculator for the S&P 500 and the Dow Jones Industrial Average (DJIA). They publish index data, including total returns, in daily, weekly, and monthly reports/commentary.
  • Nasdaq Global Indexes: They are the official index calculator for the NASDAQ Composite. They also publish fact sheets and performance reports with total return data.
  • Financial News Agencies and Publications: News outlets like The Associated Press (AP) and financial publications like Investopedia regularly report on the daily, weekly, and year-to-date (YTD) returns of these major U.S. indexes.
  • Federal Reserve Economic Data (FRED) / St. Louis Fed: FRED, maintained by the Federal Reserve Bank of St. Louis, is a public resource that often includes daily closing levels for indices like the S&P 500, which can be used to calculate returns.
  • Financial Data Platforms (e.g., Bloomberg, YCharts, MSCI): Professional and commercial financial data providers often republish or calculate returns based on the official index data for their clients.