First look at the tariff job market
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Welcome to Seeking Alpha's Wall Street Brunch, our Sunday look-ahead to this week's market-moving events, along with the weekend's top news and analysis. Hello, today is Sunday, June 1st, and I'm your host, Kim Kahn. Wall Street starts June with a strong performance in May under its belt. The S&P 500 gained 6.1% for the month, its best performance since an 8.9% rise in November two years ago.

Preliminary results from the 2025 reconstitution of the Russell U.S. indexes show that the U.S. equity market has grown significantly over the past year. As of the April 30th rank date, the total market cap of the Russell 3000 index rose 10%, reaching $58.4 trillion, up from $53 trillion at the time of last year's rebalance. On the macroeconomic front, the major news bookends the week.

On Monday afternoon, Fed Chairman Jay Powell will deliver opening remarks at the Federal Reserve Board's International Finance Division 75th Anniversary Conference. Powell is coming off his first meeting with President Donald Trump in the latter second term, with Trump urging Powell to lower rates.

But the Fed later released a statement that the Federal Open Market Committee will set monetary policy as required by law to support maximum employment and stable prices. Those decisions will be, quote, based solely on careful, objective, and non-political analysis, unquote.

On Friday, the May employment report is due, with economists expecting a gain of $130,000 in non-farm payrolls. Wells Fargo economists say May's employment report will offer the first real look at how the labor market is faring under a rapidly changing trade environment. The figures will capture hiring that occurred in the initial weeks following Liberation Day's tariff announcements, a period in which uncertainty about economic policy and growth reached fever pitch.

The appetite to hire among firms remains tepid. New job postings on Indeed fell to their lowest level since 2020 in May, hiring plans among small businesses are back near their cycle lows, and PMI readings of employment continue to hover near contraction territory.

May is also typically one of the stronger months of the year for hiring, so the dampened interest in bringing on new workers could be amplified by seasonal factors expecting more additions to the payroll. Yet, the wait-and-see mode that has firms cautious to hire applies to efforts to retain existing employees. As a result, the still low level of layoffs indicated by initial jobless claims should prevent net hiring from collapsing in May under the weight of recent uncertainty, they said.

Earnings continue to thin out, but investors will get results from Broadcom and CrowdStrike. When Broadcom reports on Thursday, analysts expect a 43% year-on-year increase in profit and a nearly 20% growth in revenue. The stock has surged over 74% in the past 12 months, driven largely by momentum in AI-related demand and strong positioning in the semiconductor space.

Seeking Health analyst Michael Del Monte reiterated a buy rating with a $265 price target for Broadcom, citing sustained hyperscalar capital spending from companies like Meta, Microsoft, Amazon, and Alphabet as key growth drivers. While Broadcom trades at a premium, Del Monte sees additional upside fueled by strong compute and networking demand, though he advises investors to watch for volatility around earnings.

Cybersecurity company CrowdStrike is expected to post EPS of 66 cents on revenue of $1.11 billion when it reports on Tuesday. RBC analysts recently expressed an optimistic view of software stocks for 2025, as recent checks on the sector suggest stable demand trends despite ongoing macro or tariff uncertainty. In the cybersecurity segment, RBC increased the price target for CrowdStrike, citing continued success with cross-selling efforts.

Also on the earnings calendar, on Tuesday, Hewlett Packard Enterprise and Dollar General join CrowdStrike. Dollar Tree weighs in on Wednesday, along with Broadcom, Lululemon Athletica, DocuSign, Samsara, and Rubrik issue numbers on Thursday.

In the news this weekend, JPMorgan Chase Chairman and CEO Jamie Dimon has warned that the rising federal debt can threaten the U.S. bond market unless the government takes remedial measures. You are going to see a crack in the bond market, Dimon said at the Reagan National Economic Forum in California, according to the Financial Times. I'm telling you this is going to happen. His comments came as Trump's sweeping multi-trillion dollar tax break package makes its way through the Senate after clearing the House by a narrow margin last week.

And China EV makers reported main delivery numbers over the weekend. Xpeng delivered 33,525 smart EVs, up 230% year-over-year.

Year-to-date, the company delivered 162,578 smart EVs, a 293% increase compared to the same period last year. Li Auto delivered 40,856 vehicles, up 16.66% from the same period last year and up 20.38% from April. And NIO delivered 23,231 vehicles, an increase of 13.1% year-over-year, but down sequentially for the third straight month.

For income investors, Harley-Davidson and Lockheed Martin go ex-dividend on Tuesday, Harley-Davidson pays out on June 18th, and Lockheed pays out on June 27th. Halliburton goes ex-dividend on Wednesday with a June 25th payout date. BlackRock goes ex-dividend on Thursday, paying out on June 23rd. And in the Wall Street Research Corner, B of A says financial markets are entering a high-stakes inflection point.

Risk assets are coiled for a major move, either an explosive breakout or a sharp breakdown, with brokers, banks, and Bitcoin acting as key indicators, according to strategist Michael Hartnett. Markets are "...whispering big breakout or breakdown," Hartnett said, pointing to several exchange-traded funds and crypto prices. The tells? Brokers, ticker XBD, at $900, banks, ticker IXG, at $105, and Bitcoin at $110,000.

Clean upside breaks would be very bullish. Double tops on charts would be very bearish, he said. That's all for today's Wall Street Brunch. Look for links to stories in the show notes section. Don't forget, these episodes will be up with transcriptions at SeekingAlpha.com slash WSB. And join the elite community of real investors to unearth great investing ideas. Just head to SeekingAlpha.com slash subscriptions.