NASDAQ 100, Dow Jones, S&P 500: Higher Ahead of Durable Goods Data; Walgreens Earnings on Tap

Highlights

• Dow Jones futures show modest increase, focusing on upcoming economic data and end of Q2.
• U.S. Treasury yields rise, drawing attention to economic indicators and Fed policy implications.
• Despite recent losses, S&P 500 and Nasdaq set for monthly gains, Q2 performance strong.

Overview

The major U.S. stock index futures showed a modest increase on Tuesday morning as investors turned their attention to upcoming economic data and prepared for the conclusion of June and the second quarter. U.S. Treasury yields climbed as investors closely observed the data for indications about the state of the economy and its potential impact on Federal Reserve monetary policy.

At 08:48, blue chip Dow Jones futures are trading 34001.00, up 30.00 or +0.09%. Benchmark S&P 500 index futures are at 4378.75, up 8.50 or +0.19% and tech-heavy Nasdaq futures are trading 14904.50, up 48.00 or +0.32%.

At 4 a.m. ET, the 10-year Treasury yield rose by over one basis point to 3.7348%, while the 2-year Treasury yield increased by more than two basis points to 4.6933%. It’s important to note that yields and prices move in opposite directions, with one basis point representing a 0.01% change.

These movements followed a day of losses on Wall Street, with the Nasdaq Composite leading the way down, dropping nearly 1.2%. Investors took profits on certain technology stocks, resulting in a 6% slide for Tesla, while Nvidia, Alphabet, and Meta Platforms finished more than 3% lower. The S&P 500 closed down by around 0.5%, while the Dow ended slightly below flat. The Dow’s six consecutive negative sessions marked its longest losing streak since September 2022.

Wall Street Slips as Tech Stocks Slide

However, despite the decline on Monday, the S&P 500 and Nasdaq remained on track to finish June with gains of over 3%, while the Dow was poised for a monthly advance of nearly 2.5%. As the second quarter and first half of 2023 drew to a close, the Nasdaq outperformed with a gain of over 9%, while the S&P 500 and Dow were set to finish the period up more than 5% and 1%, respectively.

Small Caps Shine, Nasdaq Struggles

It’s not uncommon to witness some reversal of trends toward the end of a quarter. The recent performance, with small caps performing well while the Nasdaq fared poorly, may be attributed to portfolio rebalancing effects. The Russell 2000, representing small-cap stocks, concluded Monday with a marginal gain of 0.09%.

Traders Eyeing Home Sales, Durable Goods, Consumer Confidence

Investors eagerly awaited a series of morning data releases, including home sales, durable goods orders, and consumer confidence. Economists predicted a potential 0.8% decline in durable goods orders, while core durable goods were expected to remain unchanged. The Conference Board’s Consumer Confidence Index was anticipated to rise to 103.9 from 102.3. New home sales were projected to dip slightly from 683,000 to 677,000.

Walgreen Reports Before the Bell

Additionally, market participants kept a close watch on Walgreens‘ quarterly earnings report scheduled before the opening bell. Any developments in Russia following the brief rebellion over the weekend were also of interest.

Short-Term Outlook:  Cautious End-of-Quarter Trading

Overall, the stock futures inched higher, awaiting economic data that could provide valuable insights into the market’s future trajectory. With investors assessing the implications of the data on monetary policy and a quarter-end portfolio rebalancing effect, market sentiment remained cautiously optimistic.