Nasdaq, S&P 500 Set To Open Higher On Nvidia Prop, FedEx Earnings, But Traders Could Move To Sidelines Ahead Of Key Data: Analyst Says Underweighting Techs 'Contrarian Bet'
Futures trading reflects the same trend seen on Tuesday, with the Nasdaq and S&P 500 futures firming up in early trading, while the Dow futures slipped. Notwithstanding the tech strength, the underlying sentiment is likely to be one of caution ahead of some key market-moving economic catalysts scheduled for the next two sessions. The Nvidia Corp. (NASDAQ:NVDA) rally continues, with the stock firmer in premarket trading. It remains to be seen if the concentrated tech strength could be strong enough to lift the broader market.
The market could also receive a shot in the arm from FedEx Corp.’s (NYSE:FDX) positive earnings and M&A rumors.
The Federal Reserve’s favorite inflation gauge, more Fed speeches, consumer sentiment data and durables goods order are among the key reports due on Thursday and Friday. More importantly, traders may also focus on the presidential debate that is scheduled for late Thursday.
| Futures | Performance (+/-) |
| Nasdaq 100 | +0.21% |
| S&P 500 | +0.05% |
| Dow | -0.14% |
| R2K | -0.30% |
Cues From Last Session:
The tech rally, spearheaded by Nvidia Corp. (NASDAQ:NVDA), imparted strength to the broader market on Tuesday, although weakness elsewhere dragged the Dow Jones Industrial Average lower. IT and communication services stocks launched into a strong rally and energy stocks saw modest strength but most other S&P 500 sectors closed on the red.
The tech-heavy Nasdaq Composite outperformed, hovering in positive territory throughout the session, while the S&P 500 Index braved some mid-session weakness before recovering. The two averages snapped a three-session losing streak but they did not have enough momentum to break above their previous highs.
Among the economic data released on Tuesday, consumer confidence slowed in line with expectations in June and house price growth slowed in April – all pointers toward softening growth.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | +1.26% | 17,717.65 |
| S&P 500 Index | +0.39% | 5,469.30 |
| Dow Industrials | -0.76% | 39,112.16 |
| Russell 2000 | -0.42% | 2,022.35 |
Insights From Analysts:
Fund manager Louis Navellier is confident of the tech rally continuing. “Being underweight in tech remains a contrarian bet,” he said in a note to clients. “With the end of the quarter this week, we will shortly get another round of earnings which may give new perspectives on earnings momentum, but may also reemphasize the concentration at the top, as the AI theme gains momentum,” he said.
Carson Group’s Chief Market Strategist Ryan Detrick pointed to a historical trend that is positive for the market. Since 1950, the market has never peaked in June, he said.
Upcoming Economic Data:
- The Commerce Department is scheduled to release the new home sales data for May at 8:30 a.m. EDT. Economists, on average, expect new home sales to come in at a seasonally adjusted annual rate of 640,000 up from a 634,000 rate in April.
- The Energy Information Administration will release its weekly petroleum status report at 10:30 a.m. EDT.
- The Treasury is set to auction five-year notes at 1 p.m. EDT.
See Also: How To Trade Futures
Stocks In Focus:
- Rivian Automotive, Inc. (NASDAQ:RIVN) climbed over 33% in premarket in reaction to its plan to forge a partnership with Volkswagen AG (OTC:VWAGY). Lucid Group, Inc. (NASDAQ:LCID) moved higher in sympathy.
- FedEx climbed over 14% in reaction to the company’s quarterly results, while Worthington Enterprises, Inc. (NYSE:WOR) fell over 7.50%.
- Whirlpool Corporation (WHR) rose nearly 14% after Reuters reported that Bosch is weighing a bid for the former.
- General Mills, Inc. (NYSE:GIS) and Paychex, Inc. (NYSE:PAYX) are among the notable companies reporting earnings ahead of the market opening.
- Those reporting after the close include Micron Technology, Inc. (NASDAQ:MU), H.B. Fuller Company (NYSE:FUL), Worthington Steel, Inc. (NYSE:WS) and Levi Strauss & Co. (NYSE:LEVI).
Commodities, Bonds And Global Equity Markets:
Crude oil futures firmed up, while gold futures pulled back. The benchmark 10-year U.S. Treasury note rose 4.1 basis points to 4.279%. Bitcoin (CRYPTO: BTC) flatlined around the $61K mark.
Asian stocks closed higher, tracking the positive close on Wall Street overnight amid the tech rally, although the Australian market bucked the uptrend. The European markets showed tentativeness in early trading.
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