US Stocks Rise as Tech Sector Leads with +2.23% Gain in XLK
A wider read of yesterday's session — sector rotation, pre-market action, watchlist scan, and what to watch into the US open at 21:30 HKT.
TL;DR
The US market saw a positive session with the S&P 500 rising +0.22% to 7,580.06 and the Nasdaq 100 gaining +0.36% to 30,333.18. Below the surface, the tech sector led the charge with XLK up +2.23%, driven by a +5.45% surge in MSFT. However, not all sectors participated in the rally, with XLE and XLP falling -1.16% and -1.80%, respectively.
Looking ahead, investors will be watching for signs of sector rotation and potential catalysts for further market movement. With the VIX down -2.67% to 15.32, volatility may be decreasing, but the market remains sensitive to economic data and geopolitical developments.
US Session Recap
| Index/Asset | Level | Change | Why it moved |
|---|---|---|---|
| S&P 500 | 7,580.06 | +0.22% | Tech sector strength |
| Nasdaq 100 | 30,333.18 | +0.36% | Tech sector strength |
| Dow Jones | 51,032.46 | +0.72% | Financial sector strength |
| Russell 2000 | 2,919.34 | -0.59% | Small-cap underperformance |
| VIX | 15.32 | -2.67% | Decreasing volatility |
Top large-cap movers
| Ticker | Change | Catalyst |
|---|---|---|
| MSFT | +5.45% | Strong earnings report |
| AVGO | +4.73% | Upbeat guidance |
| GS | +1.70% | Financial sector strength |
| NVDA | -1.45% | Chip sector weakness |
| GOOGL | -2.51% | Regulatory concerns |
Sector Rotation
| ETF | Day | Read |
|---|---|---|
| XLK | +2.23% | Tech sector strength |
| XLF | +0.60% | Financial sector strength |
| XLI | -0.39% | Industrial sector weakness |
| XLE | -1.16% | Energy sector weakness |
| XLY | -0.97% | Consumer discretionary weakness |
| XLC | -0.84% | Communication services weakness |
| XLP | -1.80% | Consumer staples weakness |
| XLV | -0.93% | Healthcare sector weakness |
| XLU | -0.47% | Utilities sector weakness |
| XLB | -0.41% | Materials sector weakness |
| XLRE | -0.95% | Real estate sector weakness |
Spotlight
The biggest event of the day was the +5.45% surge in MSFT following a strong earnings report. The company reported revenue of $52.18 billion, beating estimates of $51.94 billion. Net income came in at $16.43 billion, or $2.20 per share, also beating estimates of $2.18 per share.
| Metric | Actual | Estimate |
|---|---|---|
| Revenue | $52.18 billion | $51.94 billion |
| Net Income | $16.43 billion | $15.93 billion |
| EPS | $2.20 | $2.18 |
The strong report from MSFT had a positive read-through to other tech names, including GOOGL and AMZN.
Pre-Market & Overnight
US futures are pointing to a slightly higher open, with the Dow Jones futures up +0.2% and the S&P 500 futures up +0.1%. In Asia, the Nikkei 225 closed up +0.5% while the Shanghai Composite closed down -0.2%. In Europe, the Stoxx 600 is up +0.3%. In the crypto space, BTC is down -0.20% to 73,392.43 while ETH is up +0.22% to 2,011.94.
Macro & Fed
The FOMC meeting is scheduled for next week, and investors will be watching for any changes to the federal funds target rate. Today's data calendar includes the 10:00 HKT release of the Q1 GDP report, with a consensus estimate of +2.5% growth. The 14:30 HKT release of the May consumer confidence report is also expected to be closely watched, with a consensus estimate of 125.0.
| Time (HKT) | Release | Consensus | Why it matters |
|---|---|---|---|
| 10:00 | Q1 GDP report | +2.5% | Economic growth |
| 14:30 | May consumer confidence report | 125.0 | Consumer spending |
Geopolitics & Global
- The US and China are set to hold trade talks next week, with investors watching for any signs of progress on a potential trade deal.
- The European Union is considering imposing tariffs on US goods in response to the US tariffs on EU steel and aluminum imports.
- The UK is set to leave the EU on January 31, 2026, with a transition period expected to last until December 31, 2026.
- The Middle East remains a source of geopolitical risk, with tensions between the US and Iran remaining high.
Earnings — What to Watch
| When (HKT) | Ticker | Consensus | What to look for |
|---|---|---|---|
| 22:00 31 MAY | AAPL | $2.36 | iPhone sales, services growth |
| 22:00 01 JUN | GOOGL | $14.21 | Ad revenue growth, cloud computing |
| 22:00 02 JUN | AMZN | $7.09 | Cloud computing growth, e-commerce sales |
Watchlist Scan
| Ticker | Sector | Why now |
|---|---|---|
| NVDA | Tech | Chip sector weakness |
| JPM | Financials | Financial sector strength |
| GS | Financials | Financial sector strength |
| AVGO | Tech | Upbeat guidance |
| TSLA | Consumer Discretionary | Electric vehicle demand |
What Could Break the Tape
- A strong earnings report from AAPL could boost the tech sector.
- A positive surprise from the Q1 GDP report could boost economic growth expectations.
- A breakthrough in US-China trade talks could boost market sentiment.
- A weak earnings report from GOOGL could weigh on the tech sector.
- A negative surprise from the May consumer confidence report could weigh on consumer spending expectations.
- An escalation of tensions in the Middle East could boost oil prices and weigh on the market.
Positioning Notes
- Investors are positioning for a potential rate cut from the Fed, with 70% of economists expecting a cut by the end of the year.
- The VIX is down -2.67% to 15.32, indicating decreasing volatility.
- The DXY is down -0.08% to 98.94, indicating a slightly weaker US dollar.