WS #7873

The dominant themes from the previous window remain largely unchanged, but several new data points have emerged. The US government's $2 billion equity stake in nine quantum computing firms, including IBM and GlobalFoundries, is a significant positive catalyst for the quantum sector, with IBM shares up over 4% and D-Wave up over 20% in premarket. This is a high-significance development that carries forward from the previous window. Separately, Anthropic's $15 billion annual compute deal with SpaceX, revealed in SpaceX's IPO filing, underscores the extreme demand for AI compute capacity and is a bullish signal for NVDA and MSFT. On the macro front, the US S&P Global Manufacturing PMI for May came in at 55.3, well above the 53.8 consensus, indicating expansion, while Services PMI slightly missed at 50.9 vs 51.1. The composite PMI was unchanged at 51.7. This data supports a narrative of resilient manufacturing but a softening services sector. Walmart's stock is down 7%, its worst day in 13 months, following its Q1 report, which is a bearish signal for the retail sector and consumer staples. Geopolitical tensions remain elevated: Russia launched Yars and Zircon missiles as part of nuclear drills, and Ukraine continues drone strikes on Russian oil refineries, adding upward pressure on oil prices. However, Belarus stated it will not be dragged into the Ukraine conflict, a slight de-escalation signal. The Iran ceasefire narrative is stable with no new developments. Crypto markets remain flat, with Bitcoin range-bound and Hyperliquid's HYPE being an outlier. Overall, the market is digesting strong manufacturing data, quantum computing investments, and AI compute demand against a backdrop of geopolitical risk and retail weakness.