Navigating the Week Ahead: Jobs Data, Earnings, and Market Volatility
The Market Landscape: Beyond Trade Headlines
Wall Street is bracing for another week of market volatility, influenced by economic data and corporate earnings. While tariffs remain a significant factor, the market is increasingly reacting to other drivers, as evidenced by Nvidia’s recent earnings boost to the artificial intelligence sector.
Did You Know?
Nvidia’s performance can often be a bellwether for the broader tech industry, reflecting trends in AI adoption and investment.
Although the economic impact of Trump’s tariffs will likely be the biggest driver of corporate earnings going forward and the market’s trajectory,
investors are cautioned against fixating solely on trade headlines. The economic calendar is packed with crucial data, including construction spending and insights from the Institute for Supply Management (ISM) on the manufacturing and services sectors.
Labor Market Under Scrutiny
The U.S. labor market will be under intense observation this week, as investors seek signs of economic strain amidst ongoing trade tensions. A series of key reports will provide insights into job openings, private payrolls, and unemployment claims.
- Tuesday: The Job Openings and Labor Turnover Survey (JOLTS) report, a measure of labor market slack, is released. This report, published by the Bureau of Labor Statistics, can indicate potential wage inflation by comparing job openings to available workers.
- Wednesday: ADP’s monthly report on private job creation is expected to show 112,000 jobs added in May, according to Dow Jones. This report is often used as a predictor for the official government jobs report.
- Thursday: Weekly jobless claims will be closely watched, especially after the previous report showed continuing claims at their highest levels since november 2021.
- Friday: The nonfarm payrolls report is expected to reveal that the U.S. added 125,000 jobs in May, a decrease from 177,000 in April. The unemployment rate is projected to remain steady at 4.2%.
Pro Tip
Pay attention to the trend line in weekly jobless claims rather than drawing conclusions from a single week’s data. This provides a more accurate picture of the labor market’s health.
The central question for investors is: What does this mean for the likelihood of Federal Reserve interest rate cuts this year?
The Fed’s dual mandate of price stability and maximum employment is complicated by the uncertain effects of tariffs, which could together fuel inflation and weaken the labor market. As Fed Chairman Jerome Powell has stated, the Fed will remain data dependent, making these labor market reports particularly significant.
Earnings Spotlight: CrowdStrike and Broadcom
This week’s corporate earnings reports will provide further insights into the economic landscape, with CrowdStrike and Broadcom taking centre stage.
CrowdStrike (Tuesday After Close)
Key metrics to watch in CrowdStrike’s fiscal 2026 first-quarter earnings report include annual recurring revenue (ARR) and operating margins.Last quarter, the cybersecurity provider reported ARR growth of 23% to $4.24 billion. The consensus for the upcoming quarter is $4.42 billion, implying a year-over-year increase of 21%, according to FactSet.
Operating margins are also crucial, as soft full-year guidance on this metric previously led to a significant sell-off in the stock. The LSEG consensus estimate is for revenue of $1.104 billion and EPS of 65 cents.
Broadcom (thursday After Close)
Broadcom’s fiscal 2025 second-quarter earnings report will focus on the growth of its custom AI chip business, which grew 77% year-over-year to $4.1 billion last quarter. The market anticipates 7% sequential growth to $4.4 billion for the second quarter, according to Oppenheimer.
Investors will be keen to hear CEO Hock Tan’s insights on Broadcom’s custom chip customers and their future spending plans. Progress on the VMWare acquisition, part of Broadcom’s software business, will also be closely monitored. The LSEG’s consensus for Broadcom is for revenue of $14.99 billion and EPS of $1.56.
Economic Calendar: A Week at a Glance
- Monday, June 2:
- Census Bureau’s Monthly Construction Spending Report at 10 a.m. ET
- ISM Manufacturing PMI at 10 a.m.ET
- Before the bell: Campbell Soup (CPB), Science Applications International Corp. (SAIC)
- Tuesday, June 3:
- Job Openings and Labor Turnover Survey at 10 a.m. ET
- Census Bureau’s New Orders for Manufactured Goods Report at 10 a.m. ET
- before the bell: Dollar General (DG),NIO Inc. (NIO), Signet Jewelers (SIG), Ollie’s Bargain Outlet (OLLI), Ferguson (FERG)
- After the close: CrowdStrike (CRWD), Hewlett Packard Enterprise (HPE)
- Wednesday, June 4:
- ADP Private Payrolls Report at 8:15 a.m. ET
- ISM Services PMI at 10 a.m. ET
- Before the bell: Dollar Tree (DLTR), THOR Industries (THO)
- After the close: MongoDB (MDB), Five below (FIVE), PVH Corp.(PVH), ChargePoint (CHPT)
- thursday, June 5:
- Initial Jobless claims at 8:30 a.m. ET
- Before the bell: Ciena (CIEN), Cracker Barrel Old Country Store (CBRL), Lands’ End (LE), brown-Forman (BF), Hello Group (MOMO), Toro Company (TTC), Duluth Holdings (DLTH), Victoria’s Secret (VSCO)
- After the close: Broadcom (AVGO), DocuSign (DOCU), lululemon athletica (LULU), Rubrik (RBRK), ServiceTitan (TTAN), Petco Health and Wellness (WOOF), Mission Produce (AVO), Vail Resorts (MTN), Quanex Building Products (NX)
- Friday, June 6:
- Nonfarm Payrolls Report at 8:30 a.m. ET
- Before the bell: ABM Industries (ABM)