Wall Street Eyes Cautious Start, Nvidia Falls: Optimistic Analyst Says S&P 500 Could Challenge All-Time Highs

Shanthi Rexaline | July 1, 2024

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U.S. stocks could start the week on a tentative note, going by the trading in the futures market. The subdued mood comes on the back of a very solid performance so far this year. Nvidia Corp. (NASDAQ:NVDA) will likely extend its slide and exert downward pressure on tech stocks. A bullish analyst, on the other hand, predicts an incremental 15% gain for tech stocks in the second-half of the year. Daniel Ives from Wedbush expects tech fundamentals to accelerate as AI use cases materially expand.

On Monday, traders could keep an eye on bond yields amid the release of two manufacturing activity readings. The 10-year Treasury note yields are back above 4.4%. Global cues are mostly positive, and commodities are trading in the green.

Futures Performance (+/-)
Nasdaq 100 +0.07%
S&P 500 +0.14%
Dow +0.16%
R2K +0.16%
In premarket trading on Monday, the SPDR S&P 500 ETF Trust (NYSE:SPY) edged down 0.05% at $545.12 and the Invesco QQQ ETF (NASDAQ:QQQ) rose 0.17% to $479.63, according to Benzinga Pro data.Cues From Last Week:

Stocks ended the week on a mixed note as traders took stock of disappointing earnings and an encouraging inflation report that showed that the Federal Reserve’s preferred gauge fell to a three-year low. Against the backdrop, the overbought market chose to consolidate its gains.

Techs and small-cap stocks finished the week in the green, while the S&P 500 Index and the blue-chip Dow Industrials Average ended marginally lower.

Index Week’s
Performance (+/-)
Performance (+/-)
Performance (+/-)
Nasdaq Composite +0.24% +5.96% +8.26% 17,732.60
S&P 500 Index -0.06% +3.47% +3.92% 5,460.48
Dow Industrials -0.08% +1.12% -1.73% 39,118.86
Russell 2000 +1.27% -1.08% -3.62% 2,047.69

Insights From Analysts:

The S&P 500 Index has set 31 new highs this year and this could be a harbinger for better times to come, said Carson Group Chief Market Strategist Ryan Detrick. Historically, if the S&P 500 has 20 or more all-time highs at the midpoint of the year, on average, there could be 20 more all-time highs in the second half, the strategist said. The average gain for the rest of the year is 5.7%, he added.

Upcoming Economic Data:

The holiday-shortened week owing to the July 4 holiday has its fair share of economic reports. Notable among them are two sets of private-sector activity readings, the weekly jobless claims report, the May JOLTS survey results, and the minutes of the June Fed meeting. Friday’s non-farm payrolls report, however, dwarfs the others in terms of significance. Potential weakness in the labor market can give the central bank the freedom to lower rates.

On Monday, S&P Global is due to announce its final manufacturing purchasing managers’ index for June. The flash reading released in late June came in at 51.7, up from 51.3 in May.

The Institute for Supply Management will release the results of its national manufacturing survey at 10 a.m. EDT. The manufacturing PMI is expected to edge up from 48.7 in May to 49.2 in June. A reading below “50” indicates the sector is still in contraction territory.

A Commerce Department report, due out at 10 a.m. EDT, is likely to show that construction output rose 0.2% month-over-month in May, reversing part of the 0.1% drop in April.

The Treasury will auction three- and six-month notes at 11:30 a.m. EDT.

See Also: How To Trade Futures

Stocks In Focus:

  • Boeing Co. (NYSE:BA) fell over 1% in premarket trading after it confirmed its takeover of parts supplier Spirit AeroSystems Holdings, Inc. (NYSE:SPR). Spirit AeroSystems added over 6%.
  • Tesla, Inc. (NASDAQ:TSLA) rose over 1% ahead of the company’s deliveries report due Tuesday.
  • Shares of Chinese electric-vehicle startups Nio, Inc. (NYSE:NIO), XPeng, Inc. (NYSE:XPEV) and Li Auto, Inc. (NYSE:LI) climbed solidly in reaction to their June deliveries reports.
  • GameStop Corp. (NYSE:GME) moved down over 3.50% after Roaring Kitty, aka Keith Gill, was hit with a class action lawsuit, alleging that he engaged in a pump-and-dump scheme.

Commodities, Bonds And Global Equity Markets:

Crude oil futures rose on Monday and held tantalizingly close to the $82-a-barrel mark and gold futures rose modestly, The benchmark 10-year U.S. Treasury note rose 6.3 basis points to 4.408%. Bitcoin (CRYPTO: BTC) climbed over 2% over the past 24 hours but it held below the $63K mark.

Asian markets that were open for trading ended on a firm note, led higher by the Chinese and Indonesian markets. Positive manufacturing activity data out of China boosted stocks in the country. The Australian market bucked the uptrend, while Hong Kong was closed for a public holiday.

The major European markets have started on a firmer note as traders digest some key data from the region and early election results from France, which showed that the far-right wing could get to power. The euro firmed up on the news.

Read Next: SPY Vs. EEM Vs. Gold Vs. Bitcoin: If You Had Invested $1,000 In Each Of These Asset Classes At End Of 2023, Here’s How Much You’d Have Now

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