North America News Stocks Dip After Early Optimism Fizzles, Tesla and Tech Drag Markets Lower Dow -108.00 to 42,319.74 | Nasdaq -162.04 to 19,298.43 | S&P 500 -31.51 to 5,939.30 Wall Street spent much of the session flirting with key technical levels before succumbing to selling pressure. The S&P 500 briefly touched 5,999.70 but couldn’t break above 6,000. A sharp move lower followed, driven by losses in Tesla (-14.3%), Costco (-3.9%), Brown-Forman (-17.9%), and Palantir (-7.8%). The day began with optimism after President Trump and China’s President Xi held a “positive” trade call. Traders took the news as a sign of cooling tensions, but the upbeat sentiment faded. Elon Musk ignited political drama, calling for lawmakers to “kill the bill” on social media, prompting Trump to fire back by threatening to slash Musk’s government contracts. The ECB’s expected 25 basis point rate cut did little to move markets, and the euro firmed slightly against the dollar. Meanwhile, economic data in the U.S. painted a murky picture: Circle Internet Group (CRCL) became the day’s breakout star, soaring 168.5% in its IPO debut. Despite the swirl of headlines, breadth was mixed. At the NYSE, advancers and decliners were nearly even, while decliners outpaced gainers at the Nasdaq. Only one sector finished green—communication services eked out a 0.06% gain. Consumer discretionary was the hardest hit, thanks to Tesla’s plunge. Consumer staples also sank as Costco disappointed on same-store sales and Brown-Forman offered weak guidance. Year-to-date performance: Atlanta Fed GDPNow Tracker Falls to 3.8% From 4.6% The Atlanta Fed’s GDPNow forecast for Q2 growth was revised down to 3.8% from 4.6% previously. The cut reflects updated economic inputs but comes early in the quarterly cycle, where volatility in the model is common. Expectations could shift dramatically in the coming weeks as fresh data rolls in, but for now, this marks a notable softening in projected growth momentum. In their own words: The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2025 is 3.8 percent on June 5, down from 4.6 percent on June 2. After recent releases from the US Census Bureau, the US Bureau of Economic Analysis, and the Institute for Supply Management, the nowcasts of second-quarter real personal consumption expenditures growth and real gross private domestic investment growth decreased from 4.0 percent and 0.5 percent, respectively, to 2.6 percent and -2.2 percent, while the nowcast of the contribution of net exports to annualized second-quarter real GDP growth increased from 1.36 percentage points to 2.01 percentage points. US Jobless Claims Rise to 247K, Continuing Claims Edge Lower Initial jobless claims for the week ending May 31 climbed to 247,000, higher than the 235,000 expected and up from the prior 240,000. Continuing claims dipped slightly to 1.904 million from 1.919 million. The uptick in filings suggests mild softening in the labor market, although continuing claims indicate that laid-off workers are still finding new employment at a relatively steady pace. US Unit Labor Costs Jump to 6.6% in Q1, Productivity Falls More Than Expected First-quarter unit labor costs were revised up to +6.6%, above the initial +5.7% print and far exceeding expectations. This follows Q4’s +2.0% figure. Meanwhile, productivity fell 1.5%, deeper than the preliminary -0.8% reading. These metrics suggest labor-related inflationary pressure, though economists note that the data is highly volatile and lags broader economic trends. US Trade Deficit Shrinks to -$61.6B in April on Plunging Imports The U.S. trade balance improved significantly in April, narrowing to a $61.6 billion deficit from $138.3 billion in March (revised). The change was driven by a sharp 16.3% drop in imports, following a record front-loading of shipments ahead of Liberation Day tariffs. Goods imports fell by nearly $69 billion, with consumer products—especially pharmaceuticals—seeing the largest declines. Exports rose 3.0% in the same period, led by a recovery in capital goods. Despite the rebound, the trade balance is only back to late-2023 levels, and further volatility is expected in the months ahead. US May Layoffs Fall to 93.8K, Still Up Sharply From a Year Ago According to Challenger, Gray & Christmas, U.S.-based employers announced 93,816 job cuts in May—down 12% from April’s 105,441 figure. However, layoffs were still 47% higher than May 2024, when 63,816 cuts were reported. Challenger attributed the continued job pressure to “tariffs, funding cuts, consumer spending, and overall economic pessimism.” Despite the month-over-month improvement, the labor market remains under strain as companies grapple with policy uncertainty and tighter margins. NY Fed Survey: Businesses Passed Tariff Costs to Consumers Quickly A recent New York Fed survey revealed that most U.S. firms passed along tariff-related cost increases to their customers—many within days. Roughly one-third of manufacturers and nearly 45% of service firms fully passed on the cost increases. The survey, conducted from May 2–9, came before the U.S. slashed tariff rates on Chinese goods from 145% to 30%. It also found some companies raised prices on untariffed goods and services to offset rising labor and insurance costs—or to capitalize on an inflationary environment. These dynamics suggest that tariff shocks may lead to more persistent price pressures, complicating the Fed’s path back to its 2% inflation target. Trump and Carney in Quiet Talks on Trade and Security Deal According to U.S. Ambassador to Canada Peter Hoekstra, Trump and Mark Carney are engaged in quiet but frequent discussions about a comprehensive U.S.-Canada trade and security framework. The talks, described as highly confidential, reportedly include potential agreements on: Hoekstra said both sides recognize the urgency and are working toward a mutually beneficial agreement outside of NAFTA frameworks. Trump: Call With Xi ‘Very Positive,’ Trade Teams to Meet Soon In a post on Truth Social, former President Donald Trump said he had a “very good” phone call with Xi Jinping, describing it as a productive 90-minute conversation focused entirely on trade. Trump noted that the two leaders agreed on key elements of a new trade deal, including clarity around rare earths. U.S. representation in follow-up talks will include Treasury Secretary Scott Bessent, Commerce

📈 Mega-Caps Buoy Markets Amid Soft Data

🔹 Markets: Dow -91 pts, S&P flat, Nasdaq +0.81%. Gains in Meta, Amazon, and Nvidia offset weak jobs and services data.
🔹 Jobs & Services: ADP jobs +37K vs. 175K est. ISM Services PMI contracts to 49.9.
🔹 Yields & Dollar: 10-yr yield drops to 4.36%. DXY down to 98.81.
🔹 BoC: Holds at 2.75%; CPI and tariffs key to next move.
🔹 Commodities: Gold jumps to $3,382. Oil mixed—crude draw vs. product builds.
🔹 Crypto: XRP stable on $300M fund news. ETH outperforms BTC as institutions rotate.

📈 Tech & Small Caps Lead Wall Street Rally

🔹 Markets: Nasdaq +0.81%, S&P +0.58%, Dow +0.51%, Russell 2000 +1.6%. Growth stocks outperformed as NVIDIA rallied 3%.
🔹 Jobs & Factory Data: JOLTS beat at 7.391M; factory orders slumped 3.7%.
🔹 Trade: White house reiterates Wednesday deadline for global tariff proposals; Trump–Xi call expected soon.
🔹 Commodities: Crude +$0.89 to $63.41. Gold -1% on strong dollar. Silver holds $34 support.
🔹 Crypto: BTC slips below $106K on ETF outflows; ETH stays firm above $2,600.

📈 Tech Leads U.S. Rally; Gold & Silver Soar on Risk-Off Shift

🔹 Markets: Nasdaq +0.67%, S&P +0.41%, Dow +0.08%. Growth tech outperformed; autos and select megacaps lagged.
🔹 Macro: ISM Manufacturing and construction spending missed; Atlanta Fed GDPNow rose to 4.6%.
🔹 Tariffs: Trump tariffs spike aluminum premiums 25%; geopolitical tensions lift safe-haven demand.
🔹 Commodities: Gold +2.7% to $3,377; Silver +5.1% breaks $34.65. Oil +2.85% despite OPEC+ output.
🔹 Crypto: Meme coins fade; Bitcoin ETF outflows return; ETH gains on strong ETF demand.