U.S. equities moved lower on Monday in quiet trading following a terror attack in London and a breakdown in relations between Persian Gulf countries over the weekend, raising geopolitical concerns. Saudi Arabia and a number of its allies cut ties with Qatar — the site of a major U.S. military base — over alleged terrorist and pro-Iran links.

In the end, the Dow Jones Industrial Average lost 0.1%, the S&P 500 gave back 0.1%, the Nasdaq Composite lost 0.2% and the Russell 2000 ended the day down 0.6%. Elsewhere: Treasury bonds were weaker, the dollar was higher, gold gained 0.2% and crude oil gave back 0.5%.

Breadth was negative, with 1.6 decliners to every advancer on the NYSE. Volume was very light, at 79% of the 30-day average. Energy stocks led the way, ostensibly on possible oil supply concerns out of the Middle East, up 0.2%. Utilities were the laggards, down 0.5%.

Loxo Oncology Inc (NASDAQ:LOXO) surged 43.2% after announcing interim clinical data showing a 76% response rate for its larotrectinib treatment across 17 different tumor types vs. the 60% response analysts were expecting. MagicJack VocalTec Ltd (NASDAQ:CALL) gained 15.9% on buyout reports.

The Big Tech meltup continued unabated, with Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL) rising 0.8% to close above the $1,000-a-share level for the first time. Microsoft Corporation (NASDAQ:MSFT) is going vertical, up another 0.7%. And Tesla Inc (NASDAQ:TSLA) gained 2.2% to hit a new record.

On the downside, and yes, there is a downside, Herbalife Ltd. (NYSE:HLF) fell 6.7% on weak guidance. Apple Inc. (NASDAQ:AAPL) fell 1% as it unveiled a widely expected smart speaker product to a collective shrug. Management puffed up, in classic from-Cupertino fashion, about how no one in the market has yet made a really good smart speaker system.

But that sounds like sour grapes to me with AMZN dominant in the product category it innovated into three years ago with the Echo, with new variations about to be launched (Echo Show and Echo Look).

There was a heavy batch of economic news:

• Factory orders missed to the downside, falling 0.2% last month in a clear loss of post-election momentum as shown above.
• The ISM non-manufacturing activity index dipped slightly, indicating a small slowdown in the pace of growth of the services sector.
• And labor productivity was unchanged in the first quarter as labor cost inflation clocked in at a 2.2% annualized rate, a slowdown from recent trend.

Overall, there was more bad news than good news pushing the Citigroup Economic Surprise Index –which measures where the data is coming in relative to expectations — down deeper to levels not seen since 2015.

Conclusion

My takeaway from Friday remains in place: Stocks overall are flirting with their early March highs, threatening a clean breakout in defiance of a growing list of headwinds including negative seasonality (June is historically a poor month for stocks), the approach of another Federal Reserve rate hike next month and further tightening likely before the end of the year, evidence of economic slowing, sky-high market valuations and red-hot investor sentiment.

Much continues to depend on the ability of President Donald Trump to push through the tax cuts, healthcare reform and infrastructure spending plans. And much depends on how aggressively the Fed will tighten policy through the rest of the year.

We’ll know more very soon. Former FBI Director James Comey is set to testify before Congress on Thursday concerning reports Trump pressured him to drop an investigation into former national security advisor Michael Flynn’s ties to Russia — the catalyst for the severe market drop on May 17. And the Fed will unveil next policy announcement and updated economic and interest rate projections on June 14.

Continue to keep an eye on the Russell 2000 small-cap index. It’s been lagging the tech-heavy Nasdaq and remains within the confines of a seven-month consolidation range.

Should the Russell break to new highs above 1,420, then it’ll be a sign the rally is worth chasing. Especially if it’s accompanied by a rise in long-term interest rates.

Today’s Trading Landscape:

To see a list of the companies reporting earnings today, click here.

For a list of this week’s economic reports due out, click here.

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Check out Serge Berger’s Trade of the Day for June 6.

Anthony Mirhaydari is founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.