NASDAQ 100, Dow Jones, S&P 500: Traders Prepare for Second Half as US Holiday Dampens Momentum

Highlights

• Nasdaq Composite soared 31.7% in its strongest first-half performance since 1983.
• U.S. stock futures remain stable as traders anticipate the second half of the year.
• Tesla reports an 83% year-over-year increase in deliveries, exceeding analysts’ expectations.

Overview

U.S. stock futures showed little movement on Monday morning as traders geared up for the second half of what has already been a remarkable year on Wall Street.

At 08:46 GMT, the blue chip Dow Jones futures are trading 34608.00, down 35.00 or -0.10%. Benchmark S&P 500 Index futures are at 4491.00, up 2.75 or +0.06% and tech-weighted Nasdaq Composite futures are trading 15380.50, up 43.50 or +0.28%.

Record-Breaking First-Half Performance: Nasdaq

The Nasdaq Composite had its strongest first-half performance since 1983, surging 31.7%, while the S&P 500 posted its best first-half since 2019, gaining 15.9%. However, the Dow Jones Industrial Average only climbed 3.8% during the same period. The surge in tech stocks was driven by enthusiasm around artificial intelligence. Meanwhile data revealing the resilience of the U.S. economy despite higher interest rates further buoyed investor sentiment.

Market Dynamics Shift: Focus on Fundamentals in Second Half

As the second half of the year begins, market dynamics may shift from being solely driven by technical factors to a greater focus on fundamentals. Encouraging macroeconomic indicators and earnings data support the possibility of this transition. The trading week starts with a shortened schedule due to the Independence Day holiday, and investors will closely examine the latest ISM Manufacturing PMI and S&P Global manufacturing PMI data for June. These reports will provide insights into the health of the manufacturing sector ahead of Friday’s highly anticipated jobs report.

Tesla Beats Expectations with Impressive Deliveries

In the automotive industry, Tesla’s shares remained steady in overnight trading. This is following the company’s announcement of delivery and production numbers that surpassed analysts’ expectations. Tesla reported 466,140 deliveries and a total production of 479,700 vehicles in the second quarter, representing an 83% year-over-year increase. This marked the fifth consecutive quarter in which Tesla produced more vehicles than it delivered. The strength is showcasing its expanding manufacturing capacity and production capabilities.

United Airlines Faces Challenges Amid Weather Disruptions

However, on a different note, United Airlines encountered challenges over the long holiday weekend due to adverse weather conditions, leading to a slight decline in the company’s shares. CEO Scott Kirby acknowledged the need for additional gates at the Newark hub to manage frequent congestion. To mitigate the impact on affected customers, the airline provided 30,000 frequent flyer miles. Thunderstorms and air traffic control issues exacerbated the disruptions, leading to delayed flights and logistical difficulties for crews. United plans to implement long-term changes to improve operations and calls for increased investment in the FAA and air traffic control.

Short-Term Forecast:  Promising Outlook

In conclusion, U.S. stock futures started the week with little change as the market prepares for the second half of the year. Strong first-half performances, driven by tech stocks and positive economic indicators, set a promising tone. Investors will closely monitor manufacturing data and the upcoming jobs report for further insights. Additionally, Tesla exceeded expectations with its delivery and production numbers, while United Airlines faced challenges due to weather disruptions and pledged to make necessary improvements to its operations.