Trading in the index futures reflects cautious optimism among traders following the market’s record run. Wednesday’s session is abbreviated, with the stock market closing at 1 p.m. EDT, owing to the Independence Day holiday on Thursday. Volume could be anemic, which is typical of a pre-holiday session. That said, traders are left to contend with some key first-tier economic data, including ones on the labor market and the services sector.
The Federal Reserve’s June meeting minutes will drop in only after the market closes. Tesla, Inc. TSLA could lend support to the tech indices as the stock appears on track to extend its winning streak.
| Futures | Performance (+/-) |
| Nasdaq 100 | +0.05% |
| S&P 500 | +0.03% |
| Dow | +0.16% |
| R2K | +0.28% |
Cues From Last Session:
Traders cherished the let-up in the bond yields and a slightly dovish message relayed by Fed Chair Jerome Powell regarding inflation’s trajectory and sent stocks higher on Tuesday. The major averages opened lower but recovered immediately after only to move back and forth across the unchanged line in a narrow range.
The indices launched into a strong rally in the afternoon and ended notably higher. The Nasdaq Composite Index set a record closing high for a second straight day, ending above the 18,000 mark for the first time ever. The S&P 500 also closed at a new record. Both the averages, however, failed to break above their previous intraday highs.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | +0.84% | 18,028.76 |
| S&P 500 Index | +0.62% | 5,509.01 |
| Dow Industrials | +0.41% | 39,331.85 |
| Russell 2000 | +0.19% | 2,033.87 |
Insights From Analysts:
Carson Group Chief Market Strategist Ryan Detrick predicts Wednesday could bring in more gains. Sharing a chart showing historical data, he said July 3 is historically the best day of the summer and one of the strongest days of the year.
Lumida Wealth’s Ram Ahluwalia calls for a strong performance over the next two weeks, in line with seasonality. However, the wealth manager flagged potential downside volatility after the peak tech earnings season and ahead of the mid-August Democratic convention. Uncertainty would weigh down on sentiment, he added.
Upcoming Economic Data:
- ADP is scheduled to release its June private payrolls report at 8:15 a.m. EDT. Payroll gains in the sector may have accelerated slightly from May’s 152,000 to 160,000 in June.
- The Labor Department is due to release its weekly jobless claims report at 8:30 a.m. EDT. Economists, on average, expect claims for the week ended June 29 to come in at 233,000, flat with the previous reporting week.
- The Commerce Department will release the May trade balance report at 8:30 a.m. EDT. The consensus estimate calls for a widening of the trade deficit from April’s $74.6 billion to $76.3 billion.
- S&P Global is set to release its final service sector purchasing managers’ index for June, with economists expecting the measure to remain unchanged from the flash reading of 55.1, but rise from 54.8 in May.
- The Institute for Supply Management is due to release the results of its non-manufacturing survey for June at 10 a.m. EDT. The non-manufacturing PMI is estimated at 52.8 for the month, down from 53.8 in May.
- The Commerce Department’s factory orders report, due at 10 a.m. EDT, is expected to show a 0.3% month-over-month increase for May. This will mark a slowdown from the 0.7% growth in April.
- The Fed will release the minutes of the June Federal Open Market Committee meeting’s minutes at 2 p.m. EDT. At the meeting, the central once again held the Fed funds rate at a 22-year high of 5.25%-5.50%. The dot-plot curve released along with the Summary of Economic Projections suggested only a single cut for the remainder of the year.
See Also: How to Trade Futures
Stocks In Focus:
- Paramount Global PARA climbed over 9% in premarket on reports of a new Skydance deal.
- Tesla extended its gains and rose over 3.50%.
- Constellation Brands, Inc. STZ is scheduled to report its quarterly results ahead of the market open.
Commodities, Bonds And Global Equity Markets:
Crude oil futures rebounded from Tuesday’s losses and gold futures are rising. The 10-year Treasury dipped further, while Bitcoin BTC/USD fell over 4% over the past 24 hours and pulled back toward the $60K level.
The global equity markets were on a roll, with the Asian markets closing notably higher, tracking the buoyancy on Wall Street overnight. China bucked the uptrend amid the release of weaker-than-expected service sector activity readings. European stocks started on a firmly positive note.
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