Week ahead: Jobs report, AI earnings put Wall Street's rally to the test

• The Nasdaq surged 9% in May driven by AI enthusiasm, marking the S&P 500's longest winning streak since late 2023
• Key economic data includes ISM manufacturing/services surveys, JOLTS openings, and the Fed's Beige Book, with focus on inflation signals amid elevated energy costs
• Major tech earnings from Broadcom, Salesforce, and others will provide evidence on AI infrastructure spending strength; Quantinuum's $12.7B IPO and FedEx Freight spinoff are notable corporate events

Summary

Key Event: Wall Street faces a critical week as the May nonfarm payrolls report arrives Friday, with economists forecasting 93,000-105,000 jobs added and unemployment holding near 4.3%.

Market Performance: The S&P 500 completed its ninth consecutive weekly gain last week—the longest streak since late 2023—while the Nasdaq surged 9% in May, driven by AI enthusiasm. Markets are at record highs heading into June.

Economic Calendar: Investors will monitor ISM manufacturing and services surveys, JOLTS job openings, ADP private payrolls, and the Federal Reserve's Beige Book. Focus remains on inflation signals, particularly prices-paid components within ISM reports, as elevated energy costs concern policymakers.

Geopolitical Risks: Oil prices rose above $93 per barrel (Brent crude) following US-Iran military exchanges. The Strait of Hormuz crisis enters its fourth month, though markets anticipate a negotiated resolution. President Trump reportedly demanded changes to the latest agreement, potentially delaying a deal until late this week.

Corporate Earnings: Technology sector in focus with results expected from Broadcom (closely watched for AI infrastructure spending trends), plus earnings from Docusign and other tech names.

Capital Markets Activity: Honeywell-backed quantum computing firm Quantinuum debuts at a $12.7 billion valuation, potentially becoming one of 2026's largest tech IPOs. FedEx completes its FedEx Freight spinoff, creating a new standalone S&P 500 company.

Analyst Perspective: XTB's Kathleen Brooks notes that PMI surveys will be crucial for assessing private sector strength, with any slowdown raising growth concerns for later in 2026. Deutsche Bank emphasizes the importance of confirming labor market resilience and stable inflation at current record stock levels.