Asset Management
06/08/2026 Market Strategy
June 08, 2026
Summertime, But the Living Ain’t Easy
Stocks Pulled Back on Inflation and Fed Policy Concerns
Key Takeaways
- Stocks sold off last week as investors became more cautious, favoring some defensive sectors and energy stocks, while lightening up on some technology names. Bonds also sold off, sending the yield on the 10 -year Treasury note 9 basis points higher.
- West Texas oil prices rose 3.6% to $90.54/barrel. Negotiations between the US and Iran continued in an effort to reopen the Strait of Hormuz, which would allow energy prices to fall further.
- Last week’s employment report for May showed hiring remained strong for a third consecutive month, with upward revisions to prior months. The unemployment rate remained steady.
- The ISM reports showed expanding conditions in May for both manufacturing and services firms, with both surveys showing new orders rising.
- This week brings reports on inflation. Bloomberg’s survey shows a median rise of 0.5% for the headline CPI index on Wednesday, but just a 0.3% gain for the “core” index (excluding food and energy products). The producer price indexes are due on Thursday.
This week stock market participants have been reminded that “trees don’t grow to the sky, ” that overconcentration carries risks, and that diversification across sectors, market capitalization, and style can help one ’s portfolio navigate choppiness when market fund flows move suddenly from “risk on” to “risk off” as they did late last week.
Throughout the week expect traders and private investors to consider the biggest IPO in market history to take place on Friday and its implications for the markets in the months ahead.
What Happened ?
For most of last week it had looked like stocks were headed to close higher for a ninth consecutive week.
Q1 earnings season moved towards a close with some 99% of S&P 500 companies having reported results. Year -over -year earnings reported were up 28% (on back of revenue growth of 11.7%), well above consensus analyst expectations prior to the start of the earnings season for 12.6%.
The non -farm payrolls gain reported on Friday morning at 172,000 was nearly twice the 88,000 median forecast in a Bloomberg survey of economists.
The unemployment rate remained steady at 4.3% and other data reported in the week continued to show resilience in the US economy , including the ISM services and manufacturing surveys.
What Have You Done for Me Lately?
In our view , recent market history since the Great Financial Crisis, the COVID -19 pandemic , and what has followed since through now has shown us that while contemporary markets are quick to discount bad news they can also be fast to ignore good news.
We believe that such behavior actually reflects a healthy development in market behavior when they might have gotten “ahead of their skis” as well as markets that have come to recognize that great companies just may not always be “deer caught in the head lamps ” when it comes to dealing with uncertainty, reversals and the weighing of risks and opportunities.
Context helps us in recognizing that while the Dow Jones Industrials, the S&P 500, the NASDAQ Composite, the S&P 400 (mid -caps), the S&P 600 (small -caps) and the Russell 2000 (small -caps) respectively fell last Friday: 1.35%, 2.64%, 4.18%, 1.92%, 1.79% , and 3.47% they remained respectively higher year -to -date 5.83%, 7.86%, 10.62%, 11.75%,13.98 , and at 14.17%. In our view: not to o shabby considering that we are not yet at the mid -point of 2026.
The Week Ahead
This week will find investors focused on the ADP weekly employment change numbers, on Tuesday, the CPI inflation numbers on Wednesday, followed by initial jobless and continuing unemployment claims along with the PPI headline and core data on Thursday.
Throughout the week expect traders and private investors to consider the biggest IPO in market history to take place on Friday and its implications for the markets in the months ahead.
We look for last Friday’s sell off to join what we have come to call “detours” in the direction the market has chosen to take intermittently when some catalyst appears allowing bears, skeptics, and nervous investors to take some profits without FOMO midst a bull market that looks to have “legs to move higher” based on fundamentals that appear resilient tied to the economy, corporate earnings, job growth, and the consumer, which have proven resilient so far this year.
We remain positive on stocks particularly in the US but also from a global perspective on select international markets once the current conflict in the Middle East moves towards resolution in earnest , and the economic backdrop can move towards a new normal.
Our favorite sectors of the S&P 500 remain: information technology, communications services, industrials, financials, and consumer discretionary.
We persist in favoring GARP (growth at a reasonable price) stocks, and “growthier” value (avoiding value traps) and weighting cyclicals over defensive stocks.
We suggest intermediate to longer -term investors consider the importance of diversification stateside across sectors, market caps and style (growth vs. value) and avoid overconcentration in portfolio positioning.
Name:
John Stoltzfus
Title:Chief Investment Strategist, Oppenheimer Asset Management Inc.
John is one of the most popular faces around Oppenheimer: our clients have come to rely on his market recaps for timely analysis and a confident viewpoint on the road forward. He frequently lends his expertise to CNBC, Bloomberg, Fox Business, and other notable networks.
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