Stocks Slightly Lower Early, but Chips Remain Hot

Published as of: June 2, 2026, 9:12 a.m. ET

(Tuesday market open) The tech rally out-muscled troubling war news early this week, and the epic clash between rising oil prices and bullish chip sentiment could be due for another chapter today. Stocks gave back part of Monday's rally before the open despite lower oil and yields, but the AI space remained hot and tech might get additional support from a sharp rally in shares of Hewlett Packard Enterprise (HPE), which impressed with earnings late Monday.

The S&P 500 Index rose 16% cumulatively in April and May, a two-month run matched only four times in history. Looking at those times, the index was up by a median of 17% six months later, The Wall Street Journal said. Past performance isn't precedent, and many remain concerned by recent sharp gains, especially in chips. There's plenty of "short attention span" money in the market, so to speak, and the tech sector is up 17% over the last month with no other S&P sector up more than 1.7% and most lower.

Jobs data begins soon after the opening bell with the April Job Openings and Labor Turnover Survey (JOLTS). This report isn't likely to move markets much if it's in the range of 6.9 million as analysts expect. Still, the economy's "low hire, low fire" climate has diminished openings, which could be hurting consumer sentiment ahead of Friday's May nonfarm payrolls report. Monday saw major indexes make new record highs with only two S&P sectors—tech and energy—in the green. "The S&P 500 has finished higher in each of the past five days, but its advance-decline spread has been negative every one of those days," said Kevin Gordon, head of macro research and strategy at the Schwab Center for Financial Research (SCFR).

1. Treasuries divorce stocks… for now: This week doesn't include many big Treasury auctions and talk from policy makers will quiet down as the Federal Reserve approaches its next meeting mid-month. This means the near-term yield path might depend for now on outside factors. Even if yields retest May highs above 4.6% for the benchmark 10-year Treasury note, it's unclear how much impact that would have on stocks. Last week, the running 20-day correlation between the 2-year yield and the S&P 500 Index fell to its lowest, or most negative, level on record. This suggests that moves in yields may have less impact than usual on stocks, and that's been the case over the last month as yields soared and stocks climbed to record highs. Historically, higher yields often drag stocks by raising corporate and consumer borrowing costs, slowing the economy.
    
2. Internet gate keepers watched: Cybersecurity firm Palo Alto Networks (PANW) reports later today and its competitor CrowdStrike (CRWD) reports late tomorrow. The space has been in sharp focus lately as software forges its way back from a steep drop earlier this year. Companies like Palo Alto and CrowdStrike often emphasize the incorporation of AI into their products, AI-driven demand for security, and loyal customers, which could help shield them from AI competition. Last time out, Palo Alto shares sank when investors seemed disappointed by the company's outlook for fiscal third-quarter earnings—those of the quarter it reports later today. Its forecast then was for earnings of $0.78 to $0.80 per share. The Wall Street consensus is for earnings of $0.80. As a sector, software is up 44% from April lows, Barron's reported, and received support Monday from positive comments that Nvidia (NVDA) CEO Jensen Huang made about the sector. Huang said AI agents will rely on and not replace a broad range of software tools.
    
3. Low VIX isn't whole story: Stock market volatility fell last week to levels last seen before the war, as measured by the Cboe Volatility Index (VIX). That doesn't mean all is calm because VIX only measures the S&P 500 Index as whole, not individual stocks within the market. For that, one needs to check single-stock volatility measured by the Cboe's VIXEQ Index (VIXEQ), which is boiling hot. The VIXEQ jumped more than four points last week to reach a nearly one-year high of 45%, the Cboe said Monday. Another way to measure this phenomenon is the Cboe S&P 500 Dispersion Index (DSPX), which measures the expected dispersion in the S&P 500 Index over the next 30 days. The DSPX is at one-year highs. A high DSPX means individual stocks are expected to move more independently and a low DSPX means they're expected to move closely together (similar to the index). The reason higher stock volatility hasn't translated to higher index volatility, the CBOE added, is due to historically low correlation levels. Stocks are moving, but in different directions, so index volume stayed muted. The contrast of VIX to VIXEQ tells investors that although index waters appear placid, those who buy individual stocks should likely expect turbulence.

• Hewlett Packard Enterprise surged almost 27% following better than expected earnings and a guidance hike. Cloud and AI revenue rose 22.9% year over year. Loop Capital upgraded shares to buy from hold.
   
• Marvell (MRVL) climbed more than 21% this morning after Nvidia's Huang called the chips and networking company "the next $1 trillion firm," Bloomberg reported. Nvidia has a $2 billion collaboration with Marvell.
   
• Alphabet (GOOGL) dropped 2.8% in early trading after introducing a plan to issue $80 billion of equity. The issuance will help fund its AI computing infrastructure buildout, Barron's reported. This could be good news for Broadcom, which helps design Alphabet's custom chips and reports tomorrow. Shares of Broadcom rose 6% and also might be up on Huang's positive Marvell comments, as Broadcom offers similar products to Marvell, Barron's added.
   
• CoreWeave (CRWV) popped 4.5% in the early going after BNP Paribas initiated coverage with an outperform rating and called CoreWeave one of the most "strategically important" companies within the AI infrastructure system.
   
• Dollar General (DG) added 4.4% early today after the discount retailer's quarterly results appeared to impress. Earnings beat expectations, revenues met expectations, and the company reaffirmed fiscal 2027 revenue guidance while raising earnings guidance.
   
• Tesla (TSLA) fell more than 4% Monday, possibly nicked by OpenAI's announcement that its robotics division is hiring, representing potential competition. Amazon (AMZN) and Tesla both suffered margin fears as hopes for progress ending the conflict waned, Briefing.com noted.
   
• Victoria's Secret (VSXY) surged 36% this morning. The company's quarterly results topped expectations and net sales rose 15%. The company also raised guidance.
   
• MGM Resorts International (MGM) rang up 16% gains Monday after People Inc. offered to acquire MGM in an $18 billion deal, Barron's reported.
   
• Bitcoin futures (/BTC) dropped another 3% this morning to below $70,000 after Strategy (MSTR), a cryptocurrency firm, reported it had sold bitcoin in late May.
   
• Annual inflation in the Euro area rose to 3.2% in May, the fourth straight month of gains. The European Central Bank (ECB) meets next week to make its rate decision.

Investing in IPOs at Schwab: Our new video takes investors step by step through the process of IPO investing on Schwab.com. Remember: Before deciding to invest in an IPO, investors should research, make sure the company aligns with their investment goals, and be aware of the risks.

How some teams thrive under pressure: In the new episode of Choiceology with Katy Milkman, she explores how candid cultures that invite ideas from every level of an organization can be the difference between failure and a miracle.

Year to date, these charts point to the narrowness of the rally to record highs. Just under 52% of S&P 500 stocks trade above their 50-day moving average (top chart—candlesticks), with 55% above their 200-day moving average (middle chart-candlesticks), and 48% above their 100-day moving average (bottom chart—candlesticks). The peak was nearly 75% back in January of stocks above the 50-day, but that was a much broader rally. Only two sectors rose Monday, but the S&P 500 rose again thanks to soaring market capitalization in the tech sector.

June 3: April factory orders, ADP employment change, May ISM Services PMI®, and expected earnings from Medtronic (MDT), Macy's (M), Broadcom (AVGO), and CrowdStrike Holdings (CRWD). 
June 4: First quarter nonfarm productivity, Challenger May job cuts, and expected earnings from Ciena (CIEN), Planet Labs (PL), and Lululemon Athletica (LULU).
June 5: May nonfarm payrolls, unemployment, and wages.
June 8: Expected earnings from Campbell's (CPB).
June 9: May existing home sales and expected earnings from J.M. Smucker (SJM), Casey's General Stores (CASY), and GameStop (GME).