Wall Street Watches Whether Semiconductor Rally Can Extend; Shanghai Eyes May Factory PMI

Chip Stocks Face Profit-Taking Test

Shanghai Also Watches Manufacturing Data

Wall Street this week, from June 1 to June 5, will be watching whether the rally led by artificial intelligence and semiconductor shares can extend. Investors are also focused on President Donald Trump’s final decision on a U.S.-Iran memorandum of understanding to end the war, along with the May nonfarm payrolls report.

The Philadelphia Semiconductor Index, which has led the market, has surged more than 60% over the past two months. The run-up has raised the risk of profit-taking and a pause in momentum. Trump’s decision on the U.S.-Iran war-ending MOU, which appears imminent, could also influence markets.

Investors are also closely tracking the May nonfarm payrolls data. If hiring remains solid despite the three-month war with Iran, that could itself provide a positive signal for stocks. FactSet puts the consensus forecast for May nonfarm payroll growth at 100,000. That would be a modest slowdown from 115,000 in April. The unemployment rate is expected at 4.3%.

In Shanghai, the main market catalyst this week will be the May Caixin manufacturing purchasing managers index, due on June 1. As a key gauge of the recovery, investors will be watching whether it stays above the 50 threshold and points to continued expansion. The May Caixin services PMI is due on June 3. Whether that report eases concerns over slowing domestic consumption and weakness in the services sector will be a key factor for market direction.

On June 5, investors are expected to focus on caution ahead of trade and financing data that are usually released in mid-month, as well as on whether authorities including China Development Bank supply additional liquidity.

Park Shin-young, New York correspondent, Hankyung.com, nyusos@hankyung.com