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Jobless claims and tech stocks: Here’s what could drive the market on Thursday

The S&P 500 slipped a bit on Wednesday to finish out the month of May. With the first trading day of June around the corner, here's what market strategist Max Wolff of 55 Institutional will be looking for.

Just a pause?

After a very strong start to the year, equity markets have stalled out a bit lately. From the second day of March to the last day of May, the S&P 500 has risen by just two-thirds of 1 percentage point. And the index is almost perfectly flat from Thursday's close.

"I'll be watching if we're going through a pause of market momentum, or if we've kind of lost our 'oomph,'" Wolff said Wednesday on CNBC's "Trading Nation."

Wage growth

Thursday will bring the release of initial jobless claims data, which will be followed on Friday by the May employment report.

In the jobs data, "our eyes will be firmly on the wage growth," Wolff said. "The Fed is acting like it's coming, but is it?"

Average hourly earnings have risen steadily, if mildly, over the past few years. Coming in at $26.19 in the April employment report, hourly earnings were at $25.54 a year before that, and $24.89 two years ago.

As Wolff referred to, earnings will be closely watched by the Federal Reserve, since they are thought to have a close relationship with overall inflation.

Tech leadership

Information technology has easily been the best-performing sector this year, logging a gain of nearly 20 percent while the S&P 500 is up just 8 percent. In the month of May, the comparison has been even more stark, with the tech sector rising by more than 4 percent while the S&P 500 was up just 1.2 percent.

Wolff pointed out that five tech stocks — Apple, Amazon, Facebook, Alphabet and Microsoft — have driven a huge share of the gains seen in the S&P 500 and in the Nasdaq 100 this year.

"If this [rally] is going to last, that can't," the strategist said.

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Brian Sullivan is co-anchor of CNBC's "Power Lunch" (M-F,1PM-3PM ET), one of the network's longest running programs, as well as the host of the daily investing program "Trading Nation." He is also a frequent guest on MSNBC's "Morning Joe" and other NBC properties.

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