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U.S. equity futures were mixed in early Monday trading, while Treasury yields nudged higher, as investors headed into the second half of the year focused once again on Federal Reserve rate cut forecasts and the market-boosting power of big tech stocks.
The S&P 500 ended the first half of the year the with a solid 14.5% gain, powered in large part by outsized advances for the so-called Magnificent 7 tech stocks and a 150% surge for AI chipmaker Nvidia (NVDA) .
Absent those two names, however, and the benchmark would still have gained around 6%, a level that is firmly above the long-term average gain of 4.2% for the first six months of a trading year.
Nvidia shares remained the market’s most-influential stock over the second quarter, and have powered nearly a third of the S&P 500’s year-to-date gains.
Investors are looking for largely the same kind of moves to kick-off the third quarter, as well, but will first focus on a series of labor market data releases this week that could add to bets that inflation pressures are easing into the summer months, allowing the Fed to begin lowering it key borrowing rate in early autumn.
The Labor Department will published data on May job openings on July 2, with payroll processing group ADP releasing its National Employment Report on July 3. The main June non-farm payroll report will be released on Friday July 5.
At present, the CME Group’s FedWatch continues to peg the chances of a September rate cut at around 63%, with similar odds of a follow-on move before the end of the year.
Benchmark 10-year Treasury note yields, however, are moving higher into the start of the week and were last pegged at 4.415%, with 2-year notes trading at 4.758%.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.23% lower at 105.622, thanks in part to a sharp move higher in the euro following Sunday’s parliamentary elections in France.
Heading into the start of the trading day on Wall Street, futures contracts tied to the S&P 500, which booked a 3.8% advance over the second quarter, are priced for a modest 4 point opening bell gain.
The Dow Jones Industrial Average, which actually declined 1.7% over the second quarter, is called 35 points higher while the Nasdaq is priced for a 5 point decline.
Stocks on the move include Boeing (BA) , which was last marked 1.2% lower in early trading at $179.80 each after the planemaker unveiled an all-stock deal to buy Spirit AeroSystems (SPR) for $4.7 billion.
Tesla (TSLA) shares jumped 1.6% higher ahead of the group’s second quarter delivery figures and a move by Wells Fargo to add the stock to its ‘tactical ideas’ list.
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In overseas markets, France’s CAC-40 was last marked 1.8% higher following the first round of elections which showed big gains for the far right National Rally party, but could deliver a hung parliament through tactical voting and political horse-trading in next week’s final poll.
The region-wide Stoxx 600 was marked 0.5% higher in Frankfurt, with Britain’s FTSE 100 gaining 0.3% in early London trading.
Overnight in Asia, the Nikkei 225 ended 0.12% higher on the session in Tokyo after a key economic outlook survey suggested renewed inflation pressures that could trigger a near-term rate hike from the Bank of Japan.
The regional MCSI ex-Japan benchmark, meanwhile, was marked .09% higher into the close of trading.
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