Morning in New York: Trump's deadline and the Fed's Beige Book

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

On Wednesday, June 4, investors will focus on a block of macroeconomic statistics on the services sector. The ISM Services Business Activity Index (PMI) for May is expected to rise from April's 51.6 points to 52, remaining within the range of recent months (50.8-55.8) and signaling stable growth. The service PMI from S&P Global Services for May will provide additional insight into the state of the sector. According to the consensus, it will remain at the level of the previous month - 52.3 points.

A more important event may be the publication of the Fed's Beige Book, which will provide a more accurate assessment of current economic trends and price dynamics in various regions of the US.

This Wednesday will also see the release of the ADP private sector employment report (consensus: +114k, April: +62k), which will provide a preliminary benchmark ahead of the release of official Labor Department statistics on June 6 on non-farm payrolls.

A phone conversation between Donald Trump and Xi Jinping on mutual trade is expected this Friday. The two sides accuse each other of violating the agreements reached in Geneva: the United States - due to delays on export licenses from China, China - due to the expansion of U.S. restrictions on technology supplies.

An additional factor of uncertainty is the deadline set by the White House for submitting proposals within the framework of negotiations with trade partners - it expires on June 4. Washington expects concrete steps to reduce duties, especially in the areas of industry and agriculture. Active negotiations are underway with the EU, India and Japan, but an agreement has so far been reached only with the UK.

Of the corporate events, Dollar Tree (DLTR) will report before the open and MongoDB (MDB), Five Below (FIVE) and PVH Corp. (PVH) will report after the close.

Futures on US indices demonstrate about zero dynamics. We assess the balance of risks as neutral with average volatility. We forecast the S&P 500 index to move within 5920-6030 points (from -0.8% to +1% against the previous session's closing level).

- Shares of CrowdStrike (CRWD) lost more than 6% in the postmarket following the release of its quarterly report. Revenue guidance for the current quarter in the range of $1.14 billion to $1.15 billion was below the market average guidance of $1.16 billion, a sign of reduced cybersecurity spending. At the same time, the issuer's earnings and revenue for the period were in line with consensus, and its own earnings guidance for the year was raised. The company announced a $1 billion buyback program. Despite strong operating metrics and management confidence, investors paid attention to the slowdown in growth.

- Asana (ASAN) reported better-than-expected earnings and revenue, and noted accelerating growth in large customers and positive momentum in AI adoption. However, the decline in revenue growth from last year's 26% to 9% YoY caused concern among investors. The company's securities declined by almost 8% in extended trading.

- Shares of Hewlett Packard Enterprise (HPE) added more than 4.5% in the postmarket after posting strong quarterly results. Revenue rose 6% y/y -to $7.63 billion, beating consensus, and adjusted earnings came in at $0.38 per share. The company raised the lower end of its full-year guidance and gave an optimistic guide for the third quarter.

- Shares of Wells Fargo (WFC) priced more than 4% after the close of the main session thanks to the lifting of a seven-year asset size limit.

June 3 trading on American stock exchanges ended in the plus. S&P 500 added 0.58%, Nasdaq 100 grew by 0.79%, Dow Jones rose by 0.51%, and Russell 2000 outperformed other benchmarks, jumping by 1.59%. Eight of the 11 sectors included in the broad market index closed in positive territory. High-tech companies (XLK: +1.50%) led the gains, thanks to robust demand for AI solutions. The real estate industry (XLRE: -0.36%) showed a decline in the rising market amid rising yields and pressure from the debt market.

JOLTS job openings in April increased to 7.391 million from March's 7.2 million, with a consensus of 7.1 million. The pace of hiring and layoffs also accelerated, with the voluntary quits rate falling to 2% from its peak in March. The largest declines in job openings were recorded in the hospitality and government sectors. Some growth was seen in the arts, leisure and mining sectors. In general, the picture with open vacancies remains stable.

Industrial orders statistics recorded their contraction by the maximum since January 2024, 3.7% m/m against the consensus of 3%. Negative dynamics was demonstrated by both the total indicator and the component excluding transportation (-0.5% m/m against the growth forecast). This is the first decline after four months of growth and is partly due to the end of the period of increased accumulation of industrial inventories ahead of the trade policy review.

The dynamics of quotations was also influenced by comments of representatives of FRS management. Head of FRB Atlanta Raphael Bostic stated that he favors a wait-and-see attitude and allows only one rate cut in 2025. Board of Governors member Lisa Cook warned of the risks of a stagflationary scenario due to the rate policy and emphasized that it is easier for companies to raise prices in the current environment. A similar view was expressed by FRB Chicago President Austin Goolsby, who noted the possibility of inflationary pressures intensifying in the coming weeks if trade restrictions persist.

- The publication of strong quarterly reports, which reflected growth in comparable sales and earnings, led to a strong rise in Dollar General (DG: +15.9%) quotations. Despite raising its full-year forecast, management remained cautious due to weak traffic and tariff risks.

- Signet Jewelers (SIG: +12.5%) showed strong growth thanks to revenue, margins and comparable sales exceeding expectations, as well as an upward revision of the full-year forecast. The dynamics in the international segment were particularly noteworthy.

- The news that the company is not paying $183 million in interest on DISH DBS bonds caused EchoStar (SATS: -11.3%) shares to fall. The reason was cited as ongoing inspections by the core regulator.

- Following the report of a cybersecurity incident that delayed the release of the full Victoria's Secret (VSCO: -2.7%) financial statements, the company s securities came under pressure. Preliminary results came in above guidance, but risks for fiscal 2025 remain.