🙂 Strong jobs, bad vibes 🙃

Broadcom threatened to derail the AI trade last Wednesday evening. Coming into its earnings on a scorching run, it wasn’t wildly surprising that — on the back of results that were solid but failed to give any real excuses to incrementally bid the stock — the stock shed 13% Thursday, dragging memory stocks down with it. But that wasn’t the end of it.

• Friday saw widespread selling in the tech space, and while some might blame Broadcom, those earnings were old news at the time of the sell-off. What gives?

• For starters, a blowout jobs report, which sent yields spiking. The US economy added 172,000 jobs in the month of May, sending 10-year Treasury yields higher. Experts had predicted only 85,000 new jobs — just half the reported number. 

• Good news for the economy can be bad news for the stock market, as that print slashed the implied odds of a rate cut later this year and potentially weighed on the valuations of what are perceived to be riskier assets.

Perhaps more plausible, however, is that there’s simply a general sense that momentum stocks and winners are a touch overextended. 

The Takeaway

Until very recently, winners like Micron, Sandisk, and Marvell Technology, to name but a few, have been ripping relentlessly higher. Momentum — by far the best-performing risk factor in equities in 2026 — ate it real bad on Friday, while low volatility, which has been crushed year to date, enjoyed a rare reprieve. 

The S&P 500 had been shooting for its 10th straight week of gains; so much for that.

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• Switching games: The Switch 2 launched on June 5, 2025. One year later, the handheld is the fastest-selling console in history, with 19.9 million units moved as of Nintendo’s most recent quarter. But, as the industry continues to reel from AI’s “RAMpocalypse,” lingering tariffs, ballooning game budgets that have squeezed margins, and slowing “black hole” engagement, the Switch 2 may be the last of a dying breed: a reasonably priced, mass-market console. 

• Corporate America has never been this profitable: In the first quarter of 2026, S&P 500 companies kept nearly $0.15 of profit for every dollar of revenue, according to FactSet — the highest figure recorded since the data provider began tracking the metric in 2009, and more than double the long-run historical average of around $0.06 going back to 1946. Much of it comes down to the index’s new center of gravity, the Magnificent 7.

Andon Labs is taking a different approach to AI benchmarks, like measuring how well a model can run a vending machine or a radio station. Its latest experiment lets an AI run a brick-and-mortar shop. We visited. And we had some questions for the boss.

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• ⚽️ World Cup: With the long-awaited North American World Cup coming this weekend, the markets* are clear: there’s like no chance the winner is going to be from North America. The US has just a 3% chance (which feels… ambitious), Mexico has a 2% chance, and Canada is among the 1% or lower crowd. The consensus is a European winner, with Spain (18%), France (17%), England (11%), and Portugal (10%) leading the rankings. 

• 📺 Paramount: The news that a group of states is pursuing a lawsuit seeking to block Paramount’s acquisition of Warner Bros. Discovery has rattled traders’ increasing certainty that the deal will go through, increasing the market-implied probability that Warner Bros. will be bought by nobody from 14% to 19% in a single day. 

*Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.