June 2, 2025

Markets:

U.S. stock futures declined on Monday, the first trading day of June, as global trade tensions escalated.

China pushed back on U.S. claims that it had breached a temporary trade agreement, instead accusing Washington of failing to honor its commitments. This marks a further breakdown in negotiations between the world’s two largest economies.

The renewed tensions follow a brief pause after U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng met in Geneva and agreed to a 90-day suspension of most tariffs.

Despite the uncertainty, the S&P 500 wrapped up May with a gain of over 6%, its strongest monthly performance since November 2023. The Nasdaq Composite surged more than 9% for the month, while the Dow Jones Industrial Average climbed around 4%.

Portfolio:

Heading into the new trading week, we’re holding positions in QMCO, AMC, APLD, and METU.

Let’s get right to the point. The SPY needs to reclaim the 590 level to regain momentum. A move above 595 signals breakout territory. Bulls must defend 580—this is a critical support level. Any pullback into the 583–576 range presents a potential “buy the dip” opportunity. Unless there’s a significant deterioration in China-related news, a break below 576 seems unlikely.

Looking back at last week, SPY formed an inside week amid month-end rebalancing—just as we anticipated, with choppy, consolidative action dominating the tape.

Several names appear to be on the verge of major breakouts. Focus on stocks that saw aggressive buying into last week’s close during the rebalance.

Be ready today.