Pre-Market Report – Tuesday 2 July: ASX to slip. SPI Futures down 24 points (-0.31%).

Market Updates

Wall Street kicked off the second half of the year on a positive note, with equities mostly higher in light pre-holiday trading. The Dow gained 51 points (+0.13%). Up 320 points at best. Down 81 points at worst. Big Tech drove the bulk of the gains in the S&P 500 +0.27% and the NASDAQ +0.83%, with megacaps Tesla and Apple leading the way up 6.1% and 2.9%, respectively. Chip stocks came under some selling pressure, with AMD down 2.79% and Arm Holdings losing 2.93%, pulling the Philadelphia SE Semiconductor index to a one-week low. Treasury yields jumped to multiweek highs, 10Y yield jumped 7.9bps rising past 4.45%. Higher bond yields typically boost US bank profits, the S&P 500 Bank Index jumped to a more than one-month high. JP Morgan +1.6% rose to an all-time high after it hiked its dividend to $1.25 from $1.15 as well as commencing a $30bn share buyback. On the economic front, US Manufacturing PMI fell to 48.5, missing expectations, falling for a third consecutive month. Another encouraging sign of the Fed’s policy is cooling the economy.

Among stocks, Nvidia (+0.62%) faces potential charges from French antitrust enforcers over alleged anticompetitive practices. Meta (+0.1%) received a warning from the EU about its subscription model for ad-free services on Instagram and Facebook, risking heavy fines. Boeing (+2.58%) agreed to buy back Spirit for $37.25 per share in a $4.7bn all-stock deal to address manufacturing defects. Chewy fell 6.61%, reversing early gains after influencer Keith Gill, known as "Roaring Kitty," disclosed a 6.6% stake in the company.

European equities rose overnight following the French parliamentary elections. The STOXX 50 rose 0.73%, STOXX 600 up 0.32%, and the CAC 40 advanced 1.09%. The National Rally Party won the first round but with a smaller share than expected, reducing fears of an expansionary fiscal agenda. The FTSE 100 closed flat, with gains in financial companies offset by declines in BAE Systems -3.41% and Anglo American -2.38%. Germany’s DAX gained 0.30%, buoyed by a positive inflation result, with annual inflation falling to 2.2% in June, below forecasts of 2.3%.
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