TL;DR
The US market rallied yesterday, led by the NVDA-driven +3.06% gain in the Nasdaq 100. Below the surface, the +1.76% S&P 500 move was broad-based, with all 11 sectors in the green. The VIX dropped -8.03% to 16.26, its lowest level in a month.
A closer look at sector rotation reveals that the XLK tech ETF led the charge, up +3.66%. The XLE energy ETF was the sole laggard, down -3.04% on the back of a -5.16% drop in WTI crude. The XLF financials ETF also underperformed, up just +0.68%.
US Session Recap
| Index/Asset |
Level |
Change |
Why it moved |
| S&P 500 |
7,562.55 |
+1.76% |
Broad-based rally led by tech |
| Nasdaq 100 |
30,541.41 |
+3.06% |
NVDA and other tech giants |
| Dow Jones |
51,818.27 |
+1.20% |
More muted move, led by GS and JPM |
| Russell 2000 |
2,971.74 |
+0.94% |
Small-caps lagged, but still in the green |
| VIX |
16.26 |
-8.03% |
Fear gauge drops to 1-month low |
Top large-cap movers
| Ticker |
Change |
Catalyst |
| META |
+5.03% |
Beats on earnings, guides higher |
| NVDA |
+3.41% |
Strong demand for AI-related products |
| AMZN |
+3.25% |
Expands into new markets, beats on sales |
Sector Rotation
| ETF |
Day |
Read |
| XLK |
+3.66% |
Tech leads the charge, NVDA shines |
| XLE |
-3.04% |
Energy lags on -5.16% WTI crude drop |
| XLF |
+0.68% |
Financials underperform, JPM and GS mixed |
| XLI |
+1.95% |
Industrials rise, led by AVGO and TSLA |
| XLY |
+1.69% |
Consumer discretionary rises, AAPL and AMZN lead |
| XLC |
+0.43% |
Communication services lag, GOOGL and META mixed |
| XLP |
-0.33% |
Consumer staples drop, PG and PEP fall |
| XLV |
-0.65% |
Healthcare lags, JNJ and PFE drop |
| XLU |
+0.91% |
Utilities rise, led by NEE and DUK |
| XLB |
+1.26% |
Materials rise, LIN and APD lead |
| XLRE |
-0.72% |
Real estate lags, VNQ and SCHH drop |
Spotlight
The biggest event of the day was the +5.03% move in META, which reported strong earnings and guided higher. The move was fueled by a +10% increase in ad revenue, which beat expectations.
| Metric |
Value |
Read |
| Ad revenue |
+10% |
Beat expectations, driven by GOOGL and AMZN |
| Operating margin |
25% |
Expanded 100bps YoY, driven by cost cuts |
| Guidance |
+5% |
Raised full-year guidance, citing strong demand |
US futures are pointing to a flat open, with the S&P 500 and Dow Jones little changed. Asian markets were mixed, with the Nikkei up +0.5% and the Hang Seng down -0.2%. European markets are also mixed, with the FTSE up +0.2% and the DAX down -0.1%. Crypto markets are quiet, with BTC and ETH little changed.
Macro & Fed
The FOMC meeting is scheduled for next week, with markets expecting a 25bps rate hike. The yield curve is currently inverted, with the 10Y yield at 4.47 and the 2Y yield at 4.52. Today's data calendar includes:
| Time HKT |
Release |
Consensus |
Why it matters |
| 21:30 |
Empire Manufacturing |
5.0 |
Early read on US manufacturing activity |
| 22:00 |
NAHB Housing Market Index |
62.0 |
Read on US housing market sentiment |
Geopolitics & Global
- The US and China are set to meet next week to discuss trade tensions, with markets watching for any signs of progress.
- The EU is considering new sanctions on Russia, which could further escalate tensions between the two sides.
- The UK is set to announce its latest budget, with markets watching for any signs of fiscal stimulus.
Earnings — What to Watch
| When HKT |
Ticker |
Consensus |
What to look for |
| 22:00 (16 Jun) |
ORCL |
1.23 |
Cloud revenue growth, margin expansion |
| 22:00 (17 Jun) |
KSS |
1.55 |
Same-store sales, e-commerce growth |
| 22:00 (18 Jun) |
BBY |
1.21 |
Consumer electronics sales, margin pressure |
Watchlist Scan
| Ticker |
Sector |
Why now |
| AAPL |
Technology |
Strong iPhone sales, services growth |
| MSFT |
Technology |
Cloud revenue growth, AI investments |
| AMZN |
Consumer Discretionary |
E-commerce growth, cloud expansion |
| GOOGL |
Communication Services |
Ad revenue growth, cloud investments |
| FB |
Communication Services |
Ad revenue growth, e-commerce expansion |
| TSLA |
Consumer Discretionary |
Electric vehicle sales, autonomous driving |
| BABA |
Consumer Discretionary |
E-commerce growth, cloud expansion |
| JPM |
Financials |
Interest rate sensitivity, consumer lending |
| GS |
Financials |
Investment banking, trading revenue |
| UNH |
Healthcare |
Health insurance growth, medical costs |
| PG |
Consumer Staples |
Consumer goods sales, margin pressure |
What Could Break the Tape
BEARISH TRIGGERS
- US-China trade tensions escalate, leading to tariffs and trade war
- EU sanctions on Russia lead to energy price shock and economic downturn
- Fed rate hike cycle leads to recession and market downturn
BULLISH TRIGGERS
- US and China reach trade deal, leading to tariffs reduction and economic growth
- EU and UK reach Brexit deal, leading to economic stability and growth
- Fed pauses rate hike cycle, leading to market rally and economic growth
Positioning Notes
- Long-term investors should focus on quality stocks with strong fundamentals, such as AAPL and MSFT.
- Short-term traders should watch for technical signals, such as trend lines and moving averages, to inform their trading decisions.
- Investors should diversify their portfolios across asset classes, sectors, and geographies to minimize risk and maximize returns.