Investor focus will shift from Wall Street to Main Street over the course of the week, with quarterly results from a few big names in tech and retail landing ahead of a key labor market update. May jobs numbers are slated to arrive Friday, capping off a confusing period for labor economists. Employers hired vastly more than expected in April and May, but experts are divided on what to make of the data. Some economists believe the labor market is rallying after a sluggish 2025. Others say the growth reflects surging demand for health care workers, brought on by an aging population, rather than economic expansion. They’re also unsure if recent data has captured how war with Iran is altering the economy. Unemployment remains low by historic standards. But job hunting is requiring more endurance than it once did. A quarter of unemployed people have been looking for work for more than a year, according to one recent survey.
Analysts wonder whether job numbers and other economic indicators will move markets more under new Fed Chair Kevin Warsh. Warsh, who is slated to preside over his first Fed policy committee meeting in mid-June, believes the Fed shares too much information about its approach and then becomes beholden to the public’s expectations. If investors hear less about inflation and interest rates from the Fed, they may rely more on alternative indicators for clues, analysts said. Investors have some notable earnings reports to parse before the jobs report. Dollar General and Five Below are among those set to publish results this week, which may shed light on how lower-income households are handling inflation. A number of tech companies are also slated to report, including Palo Alto Networks, CrowdStrike, and Broadcom.
What analysts are saying about U.S. stocks
JPMorgan: “We fundamentally remain cautious on AI cannibalization trades, as per our Year Ahead, but tactical stabilization remains likely. While we do not necessarily expect the repeat of 2025, when the rally was almost exclusive to Mag-7 for most of the 2nd half, we believe there is more upside for Mag-7 over the next months, as earnings are more than compensating for the stock’s rebound. We also find EM memory trade has legs, as meaningful supply additions are not coming before the start of 2028.”
RBC Capital Markets: “Following the outperformance that the US saw after the war began, the US/non-US P/E has now moved back to levels in line with the five-year average but doesn’t look highly stretched yet. On a 20-year time frame, the U.S./non-U.S. relative P/E has moved up but is not yet back to past highs. This tells us there is still some room for the US to outperform non-U.S.”
Evercore ISI: “The S&P 500 is becoming a market of stocks. Record concentration in a handful of AI names is spurring index strength and subduing the side effects of a challenging geopolitical/consumer backdrop. Heightened index exposure to a select few names in one theme can also accentuate the downside. But with valuations for the U.S. tech sector historically subdued relative to the broader index, focus remains on EPS durability, which 1Q26 confirmed is exceptionally strong.