In this June 1, 2026 market commentary, Kenny Polcari opens by noting the transition into a new month and the final month of Q2, highlighting that earnings season has ended and the next market catalyst will be economic data, especially Friday’s non‑farm payroll (NFP) report. He reviews the latest equity performance: the Dow, S&P 500, and Nasdaq posted modest gains, while the Russell fell and the “Mag 7” underperformed; however, breadth has broadened with transports up 23% and the Russell up 17.6%, indicating that more stocks are contributing to the rally beyond the traditional AI mega‑caps. Polcari links strong transport performance to investor confidence in economic activity and notes that the VIX is low, suggesting complacency. He then shifts to macro‑asset moves, describing oil’s recent rise on renewed Middle‑East tension, bond yields climbing, and gold hovering between safe‑haven and rate‑sensitivity dynamics. Geopolitical updates include renewed clashes between the U.S. and Iran over a cease‑fire draft and Israel’s advance into Lebanon against Hezbollah, which are adding a “temperature” to markets. Polcari outlines the week’s economic calendar, emphasizing the NFP as the primary driver, while summarizing expectations for ISM manufacturing, JOLTS, ADP, services, jobless claims, and productivity data. He explains the “Goldilocks” scenario investors seek: a payroll number that is strong enough to confirm a healthy economy but not so hot as to force the Fed to raise rates. He also recaps recent earnings, noting S&P 500 companies delivered 29% earnings growth – the strongest since 2021 – and that the market has enjoyed nine straight weeks of gains, but the next catalyst must come from data rather than earnings surprises. Technical signals such as overbought RSI levels and stretched momentum are flagged as cautionary. Polcari offers a call‑to‑action for a complimentary portfolio review (phone 561‑931‑0190) and mentions his upcoming appearance on Fox Business Mornings with Cheryl Casone. He concludes with a cooking segment, walking listeners through an Italian‑style sweet‑and‑sour marinated chicken thigh recipe, drawing a metaphor between the dish’s flavor profile and the market’s current “sweet‑and‑sour” mood. The segment includes ingredient list, preparation steps, and serving suggestions, ending with a friendly sign‑off from sunny South Florida.
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Well, good morning. Yes, it's me, Kenny Polcari, your host of the party, and today is June 1st, 2026, the end of another month, the beginning of the next one, and the final month of the second quarter. So let's talk about the things that you need to know. Yes, like I said, it is a new month and stocks are celebrating. Earnings season is over, and the next catalyst for markets is going to be all about the eco data. Oil is up, bonds are down, yields are up, and gold, well, it remains confused. It's a big economic data week this morning, but the focus, let's be clear, is on the NFP report on Friday morning. And what are we having dinner tonight? We're gonna have the sweet and sour chicken thighs. Now, just a side note, I'm joining Cheryl Casone this morning on Fox Business Mornings with Maria at 8:20. Please consider joining in. Okay, so it is a new month and it is the last month of the second quarter. Summer is now in full swing and the markets continue to march higher despite so many reasons that it supposedly shouldn't. Now on Friday, we saw the Dow gain 363 points. The S&P was up 16 points. The NASDAQ added 55 points. The Russell lost 17 points. The transports gained 55. The equal-weighted S&P added 19 points while the Mag 7 lost 130 points. So let's talk about breadth for a minute because that is one of the biggest complaints, uh, about this market over the past 2 years. That it's been, that it's been being carried by a handful of the mega-cap AI names. And for a long time, that criticism was fair, but the year-to-date numbers tell us a different story. Think about what these figures are, are saying, right? The Russell is up 17.6%. The transports are way out in the lead at 23%. The NASDAQ is ahead by 16%. While the so-called Mag 7 are up 7.7%. Now, the mega caps that kept this market going for the past 2 or 3 years are now lagging both the NASDAQ and the broader S&P. That tells us that something important is happening. The average stock is contributing more to this advance than it has in the prior years. For much of '23, '24, and '25, 7 stocks were pulling the entire wagon. Today, the participation is broader, uh, and, and you can't overlook what the transports are telling us, right? A 23% gain in that group alone is significant. Recall what Dow Theory tells us, that when freight companies and airlines and railroads and logistics firms are outperforming, it is usually because investors have confidence in the economic activity ahead of us, right, and in the economy. Goods are moving, people are traveling, business is being done. That's not the kind of action that you typically see when investors are worried. And just look at the VIX. It is way, way down in the complacent zone at 1584, telling you that investors remain far more focused on earnings growth and AI than they are on the latest geopolitical headlines, right, which are always going to be there. Now, the There is one caveat here, right? The cap-weighted S&P is still outperforming the equal-weight by roughly about 2 percentage points. So let's not pretend that the leadership has completely disappeared. It has not. The larger names are still, uh, exerting an outsized influence on the overall performance, but they are no longer doing all of the heavy lifting. Here's the way I see it: over the past 3 years, 7 stocks have been pulling the wagon. In 2026, the whole team is pulling it, but the bigger horses are still out in front, and that makes sense. And honestly, that's exactly what you want to see if this bull market is going to keep climbing this Wall of Worry, that broader participation. And while Friday's headlines had investors celebrating those easing geopolitical tensions and lower oil prices and strong earnings, the reality this morning is a bit more nuanced. The temperature in the room is rising just a little bit again, and we're seeing it first in oil and then in bonds. Over the weekend, both the US and Iran clashed over the language and the demands in the draft agreement while Israel pushed deeper into Lebanon, planting a flag at the Beaufort Castle, apparently in the south Lebanon, scoring a win in their expanding ground offensive against the Iran— Iranian-backed Hezbollah organization. And all that does is raise the temperature a little bit in the room, and we're watching that clash play out across a range of assets right now. Start with oil. On Friday, crude fell another $1.15 to settle at $87.50 a barrel as investors grew confident that the Iran ceasefire would hold and the Strait of Hormuz was going to, uh, was going to stay— was going to open, right? Would stay open. This morning, oil is up $3.30 as the push into Lebanon raises fresh fears that the ceasefire is going to come under pressure So I'd say so much for the calm, right? Bonds tell the same story except in reverse. Prices rose last week, sending yields lower, but this morning bonds are under pressure and yields are on their way higher. The 2-year's up 4 bps at 4.03%. The 10-year's up 3 bps at 4.46%, while the 30-year's up 2 bps at 4.99%. And then there's gold, which under these circumstances should probably be ripping higher, right, on more tension. Instead, it's caught in this tug of war between the safe haven trade and the prospect that stronger economic data could keep the Fed cautious. This morning, gold is trading at $4,496, down $43, locked between the trend lines, right? Supports down at $4,406 and resistance at $4,630. Now, this week is full of economic data, and that should allow investors to refocus on what ultimately the markets over— what ultimately drives the markets over time, and that's the fundamentals. Remember, geopolitical headlines are great at creating short-term chaos and volatility and investor but they never really determine prices in the long term. The real meat and potatoes for investors remains the economic growth, corporate earnings, and the innovation cycle, right? This tech revolution that we're in that's driving businesses to become more productive and more efficient. And speaking of earnings, for the past 6 weeks, we've had this steady stream of earnings reports to digest. The S&P companies have delivered earnings growth of nearly 29%, which We talked about that last week, the strongest quarterly growth we've seen since 2021. Now, between AI spending and productivity gains and corporate America's ability to protect margins, earnings once again reminded us why stocks ultimately follow profits. Remember what Larry Kudlow always, always says, one of his famous lines, profits are the mother's milk for stocks. Now, but earnings season is now largely behind us, and that means the market's gotta focus on this prove-it phase, right? It's got— the easy money, uh, on earnings surprises is now over. The S&P has rallied for 9 consecutive weeks. That's a remarkable run, but the next round of earnings doesn't begin until July. So investors are going to need a new catalyst that shifts the spotlight squarely onto the economic data now. And the focus this week, and make no mistake about it, is going to be Friday's NFP labor market report. Everything else leading up to Friday's report is going to be just the warm-up act. Now today we're going to get the ISM Manufacturing, right? That's expected to be in the expansion zone. Prices Paid though is also expected to tick up just a bit. New Orders are also expected to tick up just a bit, while construction spending month over month is gonna— is expected to come in up 0.3%. Tomorrow is going to bring us the JOLTS report openings, right? Uh, the JOLTS report job openings. Wednesday gives us the ADP employment. That's expected to show an increase of 118,000 new jobs. While the ISM Services Index is expected to come in just north of the neutral line, which leaves it in the expansion zone. Thursday delivers weekly jobless claims and productivity, but let's not kid ourselves, none of those are the main events. Friday's nonfarm payroll report is what matters, period. The Street is looking for 90,000 new jobs, unemployment to hold at 4.3%, historically low, Well, the average hourly earnings are gonna— expected to be up 0.3% month over month and 3.4% year over year. What the market wants is the Goldilocks print. Not too hot, not too cold. Strong enough to prove the economy is still healthy, but weak enough to convince the Fed to keep the possibility of lower rates on the table. A hotter number and higher wages will ignite the inflation fear, and that will push yields higher. A weaker number raises the question that nobody really wants to ask out loud: is the economy slowing faster than we think? The sweet spot sits right at the middle, and that— and if we get that, uh, that's, uh, that's, uh, uh, enough to keep the bull market strong and to keep climbing that Wall of Worry. European markets are flat. There's really nothing to discuss there. US futures are higher this morning, surprisingly. Dow futures up 210, S&P's up 18, NASDAQ up 70, while the Russell is plus one. Trump has called a cabinet— he's called all the cabinet members to meet him in the Situation Room to try to make a final determination over Iran, reiterating that Iran must never have a nuclear weapon and that the Strait has to reopen now. I would not be surprised if we see a sell the news reaction if and when that final deal is announced, but I also think that too will be short-lived. The S&P closed at 7,580, up 16 points. And this morning it looks like we're gonna test S&P 7,600. If we do that, then that's gonna represent a 1,300-point move off of the March lows, which is great. But remember, momentum remains stretched. RSIs across the indexes remain at near or are kissing the overbought line, and that's just a caution flag. Either way, eventually there has to be a pullback. Markets will rotate and consolidate. In fact, you want to see that happen. After the dramatic moves that we've seen. Now, you can always give me a call to discuss your goals and your timeline, and let's assess if the risk in your portfolio and your tolerance of volatility is correct. Give me a call at 561-931-0190. I'd be happy to do a complimentary portfolio review of your risk, uh, of your risk, and then assess where we are. Okay, so what do we have for dinner? We're gonna have the sweetened style Italian style marinated chicken thighs. Now you can always use, you can always use breasts, but the dark meat is always better. Now I'm thinking I'm featuring this one today because the market is beginning to feel a little bit sweet and sour, right? Just like this chicken. So let's move on. For this, you're going to need the thighs, skin on. You need olive oil, salt, pepper, diced onion, chopped carrots, chopped celery, plenty of sliced garlic, you know, 6+ cloves. The more the better as far as I'm concerned. 1/4 cup of sugar, 1 cup of Chianti, 1/2 cup of red wine vinegar, 1/2 cup of orange juice with the pulp, and you can add sliced almonds. They're optional, but if you like them, you can add them. Now season the chicken pieces with salt and pepper, set it aside. Take out a heavy frying pan, right? Heat up some olive oil, get it nice and hot, and then put the chicken pieces in and brown on all sides. When they're done, take them and just set them aside. Now add the garlic, the carrots, the celery, sauté those for 10 minutes or so on medium heat. Turn the heat down. Now add in the sugar, the wine, the vinegar, the orange juice, and the almonds if you're using them. Bring it to a boil. Once you do, add the chicken back, skin side up. Place a lid off the center of the frying pan and turn the heat down to simmer. Cook it for about 30 minutes, right? When it's done, remove the chicken, place it on a platter, then turn the heat back up on the pan. Sauté until it gets nice and thick, maybe 4 minutes or so. Taste it to adjust for seasoning if you need it. Then when it's ready, spoon the sauce over the chicken pieces and serve it. This dish works great with a green veggie, maybe like French cut green beans or broccoli, whatever your green veggie of choice is. Now make— also make a large mixed green salad with tomatoes, red onion, cucumbers. You can dress that in a balsamic vinegar and olive oil dressing. Keep it simple, as the chicken and the marinade are really the stars of the show, and they carry the dish. Look, it is a gorgeous day here in South Florida. The sun is out, the sky is clear. Until tomorrow, take good care.
