Here is Schwab's early look at the markets for Thursday, June 4.

Stocks almost did something they hadn't accomplished since 1995: A 10-day S&P 500 Index rally. It wasn't to be, as rising yields and crude oil sapped Wall Street's bullish momentum Wednesday.

Today potentially puts markets in a holding pattern awaiting Friday's critical May nonfarm payrolls report. Investors do have Broadcom and CrowdStrike earnings to digest from late Wednesday and a couple of other earnings reports on the docket today, along with some lesser jobs reports.

Consensus for jobs growth in the nonfarm payrolls report due at 8:30 a.m. ET Friday is near 85,000, down from 115,000 in April. Wage growth is seen up 0.3%, a slight improvement from 0.2% the prior month. The Federal Reserve isn't expected to change rate policy at its mid-June meeting, but a third straight solid jobs reading might give policymakers more of a sense that they could raise rates to fight inflation without hurting jobs growth.

Possible trends to watch in the payrolls report include whether AI is limiting jobs growth in certain industries, especially tech, and if the workforce participation number continues to edge down. When that happens, it can mean the official unemployment staying unchanged even as more workers leave the workforce and fall off the employment rolls, masking jobs weakness.

Also, yesterday's monthly ADP private-sector jobs report showed a much larger growth in services jobs than in goods-producing positions, sometimes signaling that higher-paying jobs in construction and manufacturing have lagged.

Unemployment, at 4.3% in April, is expected to remain there. It's been between 4% and 4.5% for more than 20 months in a row.

Wage growth is also top of mind given that inflation-adjusted average hourly earnings growth continues to slide and is in negative territory. However, yesterday's ADP employment report for May, which showed 122,000 new jobs for the best reading since January 2025, also delivered a 4.4% rise in annual wages.

Crude oil climbed more than 2% Wednesday after fresh Middle East skirmishes and few signs of progress in negotiations. U.S. crude is back to knocking on the door of $100 per barrel after falling below $90 last week. Any further climb is likely to keep investors uncertain about the impact on consumer spending, though high energy costs do help the U.S. energy sector.

In other data Wednesday, April factory orders jumped 4.8% in April, well above the 3.5% Briefing.com consensus and from the prior month's 1.8%. However, the headline masked weakness in the key sub-reading that showed a 1% monthly drop in new orders for non-defense capital goods excluding aircraft—a proxy for business spending. It had risen 3.8% in March.

The May ISM Services PMI also came in above estimates at 54.5%, up from April's 53.6%. A 50% reading is required for expansion. This followed a strong ISM May manufacturing PMI earlier this week.

The Fed's Beige Book of regional economic trends also came out late yesterday, showing light to moderate growth across 10 of 12 U.S. regions, stable employment, and high inflation fueled by energy costs. Some businesses told the Fed they're concerned higher prices are hurting consumer sentiment. Higher-income households remained resilient, but middle-income households appeared to struggle.

Two more job reports arrive early today. Weekly initial jobless claims and monthly Challenger layoffs data. A reading of around 90,000 might be what to expect for job cuts, not far from 83,000 in April. Initial jobless claims aren't seen moving by much at 213,000. They've generally stayed between 200,000 and 220,000 in recent weeks, not levels that tend to spark concern about the jobs market.

As data piles up, investors listen more closely for insights from Federal Reserve policymakers ahead of their June 16-17 rate meeting. This will be the first one led by new Fed Chairman Kevin Warsh. His press conference will likely be "must-see" TV.

As of late Tuesday, futures trading predicted the Fed to keep rates paused, according to the CME FedWatch Tool. Chances of a rate hike this year climbed slightly to around 58% Wednesday, with odds of a cut almost nil.

Beyond the U.S., global economic growth appears to be improving, led by manufacturing. "The growth is tied to the AI capex boom, and earnings estimates are rising as a result," said Michelle Gibley, director of international equity research and strategy at the Schwab Center for Financial Research (SCFR).

In earnings news, AI chip giant Broadcom narrowly surpassed analysts' fiscal second quarter earnings and revenue estimates, but the numbers weren't in "blow-out" territory. It also guided for third quarter revenue of $29.4 billion, well above FactSet's consensus view. Shares initially fell 4.62% in post-market trading Wednesday. The bar appears very high for AI and chip-related stocks at a time when share prices are elevated so dramatically from two months ago.

Cybersecurity firm Crowdstrike suffered 9% losses in initial post-market trading following its earnings late Wednesday. This was despite a quarter that beat analysts' estimates and guidance for second quarter revenue above estimates. Fiscal year guidance also topped consensus and the company announced a four-for-one stock split.

Lululemon and Ciena are two earnings reports to watch today. Shares of lululemon recently edged up after the recent settlement of a proxy battle at the athletic apparel firm but are valued at only about one-quarter of their early 2025 peak. Weak financial results and consumer worries about the alleged presence of toxic chemicals in the company's products both weighed, Barron's noted.

Ciena, an optical networking firm that joined the S&P 500 earlier this year, has been lifted by growing demand for hardware that can support AI. Shares are up dramatically over the last two months, which means the bar may be high to impress.

Major indexes fell sharply Wednesday, with selling accelerating in the final hour. Small-caps and tech both fared poorly, though five of 11 S&P 500 sectors managed to gain. Most of the green sectors were defensive ones like real estate, healthcare, and consumer staples. Market sentiment was hurt by rising oil and yields.

"A more sustainable broadening out of market performance…would likely require an end to the war and a 'permanent" re-opening of the Strait of Hormuz," SCFR wrote in its mid-year outlook.

Treasury yields flirted with 4.5% for the 10-year note early Wednesday, a level it hasn't closed above since May 22. The upward move to 4.49% by the end of the day—fueled by rising oil prices and the solid ADP jobs data—represents another possible brake on major indexes. The 10-year yield remains in a technical uptrend of higher highs and higher lows over the last two months. A return to the peak near 4.7% would normally slow the stock market's rally but yields and stocks haven't correlated as much as normal lately.

Among individual movers Wednesday, stocks related to quantum computing, including IBM, generally fell in a move that didn't seem predicated on any particular news event. All had been rising steeply over the last week so this may have simply been profit taking. IBM's sharp dip weighed down the Dow Jones Industrial Average.

Palo Alto Networks lost nearly 6% despite earnings and guidance that topped Wall Street's expectations for the cybersecurity firm. Shares initially leaped on the news. Shares had more than doubled since mid-April heading into earnings, perhaps setting up a "sell the news" scenario.

Technology stocks ran into heavy selling Wednesday after their epic two-month climb. Some of the worst performers included ServiceNow, Lumentum, CoreWeave, Palantir, AppLovin, Super Micro Computer, and Oracle. Nvidia fell more than 3%. Selling appeared related to worries about the war and higher rates.

Despite weakness for Nvidia, the PHLX Semiconductor Index continued to climb Wednesday, rising about 1.4%. Strength came in part from Intel, which climbed 4% on a positive announcement regarding supplies.

GameStop soared 6% as the video game and consumer electronics retailer posted better-than-expected quarterly results. The company also launched a $2 billion buyback program. The rise in sales was fueled by collectibles, GameStop said.

Medtronic, a medical device firm, rose nearly 6% on solid earnings despite guidance that was under Wall Street's consensus. The company also announced what it called "strategic investments" to support the future expansion of its cardiac ablation portfolio.

Crypto-related stocks had another rough session, sliding as bitcoin dropped below $66,000 to the lowest level since late March. It’s now down more than 20% from the near-term high,

The Dow Jones Industrial Average® ($DJI) plunged 620.72 points Wednesday (-1.21%) to 50,687.07; the S&P 500 Index (SPX) lost 56.10 points (-0.74%) to 7,553.68, and the Nasdaq Composite® ($COMP) gave back 239.92 points (-0.89%) to 26,853.98.