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Nasdaq Futures Outperform, Economic Data In Focus As Market Seeks Rebound

Tech stocks poised for recovery as market sentiment improves after pullback
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Market sentiment appears to be improving after the pullback witnessed in the previous two sessions. Beaten-down tech stocks are expected to lead the recovery, as indicated by the outperformance of Nasdaq 100 futures. Traders will likely focus on economic data related to the housing market, consumer confidence, and manufacturing sectors to gain better insight into the economic and rate outlook.

The subdued sentiment observed on Friday carried over into Monday’s session, as uncertainties led to risk aversion and resulted in traders selling growth stocks, particularly in the big tech sector.

The major indices opened lower but quickly reversed course and showed early morning gains. However, the upward momentum weakened, and stocks traded in a lackluster manner for the rest of the session, closing lower.

The S&P 500, Nasdaq Composite, and Dow Industrials ended the day near two-week lows.

In contrast, small-cap stocks maintained a relatively positive sentiment and mostly traded above the flat line. Towards the end of the afternoon, they relinquished some of their gains but still closed marginally higher.

Communication services, information technology, and consumer discretionary stocks experienced the most significant declines during the session. Conversely, real estate, materials, and energy stocks made gains.

U.S. Indices’ Performance on Monday

Index                                                Performance (+/-)                                       Value

Nasdaq 100                                             -0.41%                                                      14,829.17

S&P 500 Index                                       -0.06%                                                     4,345.66

Dow Industrials                                     -0.06%                                                     33,706.34

Russell 2000                                           -0.58%                                                     1,848.76

Thanks to a strong rally off the October lows, the S&P 500 entered a new bull market on June 8, and “this young bull probably needs a breather”, said LPL analysts Jeffrey Buchbinder and Adam Turnquist.

“A look at the charts suggests this market may be due for a pause,” the analysts said adding that bull markets are not linear.

“However, the impending end of the Federal Reserve (Fed) rate-hiking campaign, and the economy’s and corporate America’s resilience help make the bull case that steers LPL Research toward a neutral, rather than negative, equities view from a tactical asset allocation perspective.”

Futures Performance On Tuesday

Futures                                  Performance (+/-)

Nasdaq 100                            -0.44%

S&P 500                                  -0.39%

Dow                                         -0.39%

R2K                                          -0.63%

A photo depicting a falling stock. In contrast to the major indices, small-cap stocks maintained a relatively positive sentiment and mostly traded above the flat line. MAXIM HOPMAN/UNSPLASH

In premarket trading on Tuesday, the SPDR S&P 500 ETF Trust (NYSE:SPY) rose 0.20% to $432.31 and the Invesco QQQ ETF (NASDAQ:QQQ) gained 0.48% to $359.41, according to Zenger News Pro data.

Upcoming Economic Data:

The Commerce Department is scheduled to release its durable goods orders report for May at 8:30 a.m. EDT. Durable goods orders may have slipped 1% month-over-month in May following a 1.1% increase in April. Core durable goods orders, which exclude transportation orders, are expected to have edged down 0.1%, slower than the 0.2% drop in April.

The S&P/Case-Shiller house price index for April is due at 9 a.m. EDT. The seasonally adjusted 20-city composite house price index may have increased by 0.5% month-over-month, the same pace of growth as in March.

The Federal House Finance Agency’s data is expected to show a 0.3% month-over-month increase and 3.1% year-over-year growth in house prices in April. This compares to increases of 0.6% and 3.6% in March. The report is due for release at 9 a.m. EDT.

The Commerce Department is scheduled to release its new home sales data for May at 10 a.m. EDT. Economists, on average, expect new home sales of 675,000 units in May compared to 683,000 units in April.

The Richmond Fed is due to release its manufacturing and services index for June at 10 a.m. EDT. The manufacturing index is expected to improve slightly from -15 in April to -10 in June, while the services index is likely to have improved from -10 in April to 7 in June.

The Conference Board is set to release its consumer confidence index for June at 10 a.m. EDT. The index may have increased from 102.3 in May in 104 in June.

The Dallas Fed is set to release its regional services index for June at 10:30 a.m. EDT. The consensus estimate calls for a decline in the index from 6.9 in May to 6 in June.

The Treasury will auction five-year notes at 1 p.m. EDT.

Stocks In Focus:

  • Lordstown Motors Corp. (NASDAQ:RIDE) plummeted 55.52% in premarket trading after the electric vehicle startup filed for Chapter 11 bankruptcy protection.
  • Tesla, Inc. (NASDAQ:TSLA) rebounded by 1.50% following its 6%+ drop on Monday.
  • Lucid Group, Inc. (NASDAQ:LCID) climbed over 6% as the momentum set in motion by a deal announced with British luxury automaker Aston Martin continues.
  • Korn Ferry, Walgreens Boots Alliance, Inc. (NASDAQ:WBA) and Schnitzer Steel Industries, Inc. (NASDAQ:SCHN) are among the major names due to report their quarterly results ahead of the opening of the market.

Commodities, Bonds, Other Global Equity Markets:

Crude oil futures slumped 1.34% to $68.44 in early European trading on Tuesday. The commodity fell 0.83% in the previous session.

The yield on the benchmark 10-year Treasury note rose 0.018 percentage points to 3.737%.

The major Asian markets ended Tuesday’s session on a mixed note, with the Japanese, Indonesian, Malaysian, Taiwanese and South Korean markets moving to the downside. On the other, the Hong Kong and Chinese markets rallied strongly, as Chinese officials continued to talk up the economy.

European stocks opened Tuesday’s session solidly higher, as traders sought bargains following the market’s six-session losing streak. The major averages in the region have given back much of the gains and traded flat in late-morning trading.

© 2023 Zenger Zenger News does not provide investment advice. All rights reserved.

Produced in association with Benzinga

Edited by Bhujaya Ray Chowdhury and Virginia Van Zandt

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