Morning in New York: the market is watching the Musk-Trump conflict. Who can win?

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

The main macro publication this Friday will be the official labor market statistics for May. It is expected that the number of new jobs will amount to 125 thousand with the average for the last 12 months of 157 thousand, and the unemployment rate will remain at 4.2% with the average since the beginning of the year at 4.12%. The cooling of the labor market, caused by the tariff policy, is still within the statistical norm. A sharp deterioration of the situation may cause a sharp reaction of stock exchange players. If the number of new vacancies is less than 70 thousand and unemployment rises to 4.4%, the impact of trade restrictions on the economy will be reconsidered by the investment community.

The conflict between Donald Trump and Elon Musk will continue to attract increased interest from bidders. On Friday, according to Politico, a phone conversation between the president and the businessman is to take place. Investors viewed the news as positive, with Tesla shares reversing upward on the postmarket after a significant decline during the main session.

Futures on US indices are trading in the plus due to a possible decrease in the degree of confrontation between Trump and Musk. We assess the balance of risks for the upcoming session as neutral with high volatility amid the publication of data on the labor market. We forecast the S&P 500 index to move within 5880-6000 points (from -1% to +1% to the previous session's closing level).

- Shares ofLululemon Athletica (LULU) reacted by falling on the deterioration of some forecasts for the current quarter and fiscal year, despite above consensus earnings and revenue for the first three months of 2025. The full-year earnings guidance remains within the same range.

- Broadcom (AVGO) reported slightly better than expected earnings, revenue and EBITDA for the last quarter and gave an optimistic outlook for the current quarter. Management expects revenue of about $15.8 billion with an adjusted EBITDA margin of at least 66%. Nevertheless, AVGO shares fell after the main trading session as investors expected higher figures.

- Rubrik (RBRK) rose 6.5% on the back of the company's earnings release, which showed an impressive 48.7% YoY increase in revenue and better-than-expected adjusted earnings. The outlook for the current quarter and the full fiscal year 2026 includes solid subscription revenue growth and further improvement in adjusted earnings (-$0.15, $0.17 better than expectations).

- Amazon (AMZN) is investing more than $5 billion to build additional data centers for its web services division in Taiwan that will also serve the broader Asia-Pacific region.

- Against the backdrop of the conflict between Musk and Trump, the quotes of competitors SpaceX Rocket Lab USA (RKLB: +4%) and AST SpaceMobile (ASTS) rose.

- The successful IPO of steiblecoin issuer Circle (CRCL) may encourage other major members of the cryptocurrency industry to follow suit. The sector is benefiting from support from the White House and regulatory easing. Circle shares have shown strong positive momentum in the post-market.

June 5 trading on the U.S. stock exchanges was held in conditions of increased volatility and ended in the negative. S&P 500 fell by 0.53%, Nasdaq 100 corrected by 0.8%, Dow Jones decreased by 0.25%, Russell 2000 lost symbolic 0.05%. Shares of the Magnificent Seven showed mixed dynamics. Quotes of Tesla (TSLA) went down sharply due to the aforementioned squabble between Elon Musk and Donald Trump. Almost all sectors included in the broad market index closed in the red zone. Among the outsiders were manufacturers of cyclical consumer goods (XLY) and consumer staples (XLP), as well as commodities companies (XLB). The communications sector (XLC) was the top performer.

The head of Tesla criticized the Republican budget bill and the cancellation of the EV mandate, accusing Trump of preserving subsidies for the oil and gas industry, and also said that the president appears in the «Epstein files» and would have lost the election without Musk's help. The American leader called the entrepreneur crazy and suggested saving budget funds by canceling contracts and subsidies received by his business structures. In response, Musk threatened to decommission the SpaceX Dragon spacecraft, although he later abandoned the idea.

The markets were also influenced by the labor market statistics: the number of initial applications for unemployment benefits amounted to 247 thousand with a consensus of 236.5 thousand after 239 thousand a week earlier. The number of reapplications was slightly below average forecasts. The Q1 labor productivity estimate was revised from -0.8% to the lowest since April-June 2022 -1.5% (consensus: -0.5%). Foreign trade deficit in April came in at $61.6 bln vs. expectations of $67.5 bln.

The phone conversation between Trump and Xi Jinping was hailed by the American president as positive for both sides. A new meeting between the negotiators on trade issues was announced. The heads of state expressed their readiness to receive each other with an official visit. Although there are no concrete agreements yet, market participants took a positive view of the very fact of resumption of dialog between Beijing and Washington.

- Suzano (SUZ: +7.4%) announced a strategic partnership with Kimberly-Clark (KMB) to create an international hygiene and professional products company. The deal will see Suzano take a 51% stake in the joint venture, Kimberly-Clark will have the remaining 49%. 

- Five Below (FIVE: +5.6%) reported a better-than-expected first quarter. Margins were positively impacted by inventory optimization. The company raised its EPS and revenue forecasts for the year and cited tariff mitigation measures.

- ChargePoint Holdings (CHPT: -22.5%) reported a weak first quarter and gave conservative revenue guidance in the range of $90-100 million with a consensus of $108.35 million, based on the impact of macroeconomic uncertainty and tariff risks.

- Planet Labs (PL: +49.4%) reported 9.6% YoY revenue growth and zero adjusted EPS, which was above expectations. Annualized revenue and gross margin guidance was raised with a moderate EBITDA loss. Management noted the achievement of positive free cash flow, which should remain resilient despite upcoming investments and macroeconomic challenges.