TLDR
- Nasdaq delivered an exceptional 8%+ gain in May, marking its strongest two-month period since 2002, powered by technology sector strength.
- All three major U.S. indexes closed last week at historic peaks, with Monday futures indicating additional upside momentum.
- Weekend military action saw U.S. forces target Iranian radar installations and drone facilities, with Iran claiming countermeasures.
- Energy markets reacted sharply Monday, pushing Brent above $93 and WTI past $90 per barrel.
- Market participants are focused on Friday’s employment data for insights into labor trends and potential Fed policy shifts.
The opening of June finds Wall Street riding high after a powerful May performance, with equity benchmarks across the board posting all-time closing records. Technology shares provided the primary thrust, and pre-market indicators suggested continued bullishness Monday morning.
Futures contracts showed Dow advancing 0.1%, S&P 500 climbing 0.3%, and Nasdaq 100 jumping 0.6% in early Monday action. This momentum follows a May session where the Nasdaq Composite surged more than 8%, the S&P 500 added approximately 5%, and the Dow tacked on close to 3%.
The combined April-May performance for the Nasdaq marks its strongest consecutive two-month gain since the final months of 2002. Robust quarterly results from technology enterprises, especially AI chipmakers, have provided the primary catalyst for this upward trajectory.
Yet even as equity markets flourish, international tensions continue to simmer. U.S. military aircraft conducted strikes against Iranian radar installations and unmanned aircraft facilities over the weekend. Iran’s Islamic Revolutionary Guard Corps announced retaliatory actions, perpetuating a sequence of military confrontations that has persisted for several weeks.
Energy Commodities Surge on Military Escalation
Oil markets reacted immediately to the renewed conflict Monday morning. Brent crude contracts jumped 3.1% to approach $94 per barrel, while West Texas Intermediate increased 3% to approximately $90. These advances followed WTI’s sharpest monthly decline since April 2025, when it tumbled nearly 17% throughout May.
President Trump indicated he would gather his advisers to reach a “final determination” regarding Iran policy. He simultaneously urged the reopening of the Strait of Hormuz, a critical waterway for international petroleum shipments.
Market observers are monitoring developments intently. Deutsche Bank’s Jim Reid observed the confrontation has now extended 54 days since peace negotiations were initiated. He suggested markets perceive both the highest probability of resolution and the greatest risk of complete breakdown simultaneously.
“It’s hard to imagine remaining in limbo for much longer,” Reid said.
The dollar strengthened 0.1% versus major currencies as market participants sought haven assets. The benchmark 10-year Treasury yield rose modestly to 4.47%.
Employment Data Takes Center Stage
The Iran situation isn’t the sole concern capturing investor attention this week.
Friday’s nonfarm payrolls release represents the critical economic indicator on the calendar. The employment figures will provide essential information about labor market resilience and may shape projections for Federal Reserve monetary policy adjustments in coming months.
Bitcoin declined Monday, with market watchers attributing the weakness to diminished risk tolerance connected to the U.S.-Iran escalation.
Japan’s Nikkei index achieved a record close Monday, propelled by technology stocks, echoing the strength witnessed across American exchanges.
With corporate earnings season mostly concluded, the market’s trajectory may depend on whether U.S.-Iran diplomatic efforts can advance or if continued military confrontations will shake investor sentiment.
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