The U.S. stock market wrapped up a robust first week of June with a powerful rally on Friday, capping off what is shaping up to be the best start to a month since November 2024. The S&P 500 climbed 1.6% over the first five trading days of June, bolstered by positive macroeconomic data, easing volatility, and renewed optimism around trade talks with China. The Dow Jones Industrial Average added 1.2%, and the Nasdaq Composite surged 2.4% in the same stretch. This upward momentum follows a strong May and shows that bulls are maintaining control, at least for now.

Friday’s action delivered an emphatic finish. The S&P 500 rose 74.13 points, or 1.25%, closing at 6,013.43. The Dow gained 567.06 points (+1.34%) to finish at 42,886.80, while the Nasdaq added 263.85 points (+1.37%) to end at 19,562.30. The Russell 2000 was also firmly higher, gaining 27.26 points (+1.30%) to close at 2,124.61. The VIX fell 7.53% to 17.09—its lowest close since the S&P 500's record high in February—signaling a notable drop in market anxiety. Gold was little changed, slipping just $1.30 (-0.04%) to $3,373.80.

The primary catalyst for Friday's rally was the May nonfarm payrolls report, which showed the U.S. economy added 139,000 jobs, slightly above expectations. Average hourly earnings rose 0.4% month-over-month, exceeding the forecasted 0.3%, while the unemployment rate held steady at 4.2%. Revisions to March and April subtracted a net 95,000 jobs from prior estimates, but markets chose to focus on the resilient headline and wage data. This helped allay fears of an imminent slowdown or stagflation and triggered broad-based buying across all 11 S&P sectors.

Energy led the charge, up 2.1%, as crude oil rallied nearly 2% to $64.60 per barrel, extending its weekly gain to over 6%. Consumer discretionary stocks were also standouts, boosted by a nearly 6% rebound in Tesla (TSLA), while semiconductors continued to run with the PHLX Semiconductor Index up 1.3%. Even with some post-earnings profit-taking in Broadcom (AVGO -3.9%), the group posted a 6.7% gain for the week. Lululemon (LULU), however, bucked the trend, plunging 20% after slashing its full-year outlook due to tariff headwinds and weaker U.S. sales.

Bond yields jumped in response to the jobs data. The 10-year Treasury yield rose 10 basis points to 4.50%, and the 2-year climbed to 4.04%, both at weekly highs. The wage growth surprise and continued labor strength tempered expectations for near-term rate cuts, although futures markets still imply two rate cuts later this year—in September and December.

Sentiment also got a boost from renewed trade diplomacy. President Trump confirmed that Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and U.S. Trade Representative Jamieson Greer will meet with Chinese officials in London on Monday, June 9, to discuss a potential trade deal. The announcement followed a "very good" call between Trump and Chinese President Xi Jinping earlier in the week, with both sides signaling progress. High-beta stocks, including those in the Invesco S&P 500 High Beta ETF, jumped 1.7% as investors embraced risk.

As the market ends a strong week, attention now shifts to a high-stakes five-day stretch beginning Monday. Investors will face a deluge of inflation data, major Treasury auctions, corporate events, and global economic releases. The headline economic reports include May CPI (Wednesday), PPI (Thursday), and the University of Michigan sentiment survey (Friday), which also includes key inflation expectations. Monday also brings the NY Fed’s Consumer Expectations Survey, giving the Fed another read on household inflation sentiment.

The fixed-income market will be tested with three major Treasury auctions: 3-year on Tuesday, 10-year on Wednesday, and 30-year on Thursday. Any signs of weak demand or tepid indirect bidding could send yields higher and undermine equity valuations, especially with the S&P perched near the 6,000 level.

On the corporate front, Oracle (ORCL) headlines earnings midweek, with investors eager for updates on its AI and cloud initiatives. Adobe (ADBE) reports Thursday and will be scrutinized for traction in its AI-enhanced creative suite. Other reports include Casey’s (CASY), GameStop (GME), Chewy (CHWY), and Kroger (KR), but none are expected to materially shift market direction.

The AI theme remains red-hot on the conference circuit. Apple’s WWDC on Monday will unveil "Apple Intelligence" potentially reshaping the conversation around Siri, on-device AI, and developer tools. Nvidia's GTC, AMD's AI Day, and Rosenblatt's Age of AI conference will reinforce the sector's momentum. Cisco also hosts its Live event, with possible enterprise AI updates.

International developments include Chinese CPI, PPI, and trade data (Sunday night), along with Japanese GDP. Europe will deliver U.K. employment, trade, and sentiment data, while the G7 Leaders Summit on Friday could headline trade, tariffs, and geopolitical tensions.

In summary, the market ended the week with strong gains across the board, supported by encouraging macro data, a drop in volatility, and positive trade rhetoric. But the path forward will demand navigation through inflation prints, bond market stress tests, and high expectations around AI. With the S&P just above 6,000, markets may need another catalyst to push decisively higher—or brace for a potential shakeout. Either way, next week promises to be pivotal.