Dow Jones Futures Drop: Federal Reserve Chief Powell’s Impact Increases Stock Market Uncertainty; Tesla, Palantir Maintain Strong Performance

Dow Jones Futures Decline- Last week, the stock market witnessed a notable rally, with the S&P 500 and Nasdaq reaching fresh all-time highs, although concerns emerged over the Nasdaq’s extended valuations. In contrast, small-cap stocks retreated below crucial support levels.

Several prominent stocks, including Meta Platforms (META), Palantir Technologies (PLTR), and ASML (ASML), exhibited strong buy signals. Tesla (TSLA) notably surged, while Nvidia (NVDA) continued to perform well following a pullback from record highs.

French Parliamentary Election Results

In France, the left-wing New Popular Front emerged victorious in the final round of parliamentary elections, displacing Marine Le Pen’s far-right National Front, which had led initially. President Emmanuel Macron’s centrist alliance secured the second position, while traditional conservative parties lagged significantly behind, albeit still relevant in coalition discussions.

Current Market Trends and Economic Indicators

Today, Dow Jones futures edged down 0.2% below fair value, accompanied by a 0.15% decline in S&P 500 futures and a 0.1% drop in Nasdaq 100 futures. The 10-year Treasury yield saw a slight uptick to 4.3%.

Bitcoin’s price decreased to just above $55,000 after a 10.7% weekly decline from $56,458.26, having rebounded from a recent low of $53,700.

Federal Reserve Outlook and Inflation Data

Federal Reserve Chair Jerome Powell is set to testify before Congress this week, potentially signaling shifts in monetary policy amid recent economic data showing signs of slowdown. Market expectations lean towards rate cuts later this year, with a 77.9% probability of a cut by the September meeting and a 76.5% chance of two cuts in total for the year.

The upcoming June CPI inflation report on Thursday follows a soft June 5 jobs report, with PPI inflation data scheduled for release on Friday.

Bank Earnings Reports

JPMorgan Chase (JPM), Wells Fargo (WFC), and Citigroup (C) are scheduled to report earnings on Friday, positioned near potential buy points or early entry opportunities.

Stock Market Performance Highlights

Last week, the Dow Jones Industrial Average rose by 0.7%, the S&P 500 index gained 1.95%, and the Nasdaq composite surged by 3.5%. Conversely, the small-cap Russell 2000 index declined by 1%, slipping below its 50-day moving average.

The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) reached a record high, reflecting strength in growth stocks beyond the mega-cap sector, although lagging the Nasdaq 100’s 3.6% spike.

Commodities and ETFs

U.S. crude oil futures climbed 2% to $83.16 per barrel last week, marking a 10.1% increase over the past four weeks. Copper futures jumped 6.1%, while gold prices rose by 2.6% and silver surged by 7.4%.

Among ETFs, the Innovator IBD 50 ETF (FFTY) rose by 1.4%, the iShares Expanded Tech-Software Sector ETF (IGV) gained 2.3%, supported by constituents like Palantir (PLTR). The VanEck Vectors Semiconductor ETF (SMH) increased by 3.5%, buoyed by Nvidia as a leading holding.

Individual Stock Performance

Tesla (TSLA) skyrocketed by 27.1% to $251.52 per share last week, surpassing its 200-day moving average. Nvidia (NVDA) saw a 1.85% increase to $125.83, bouncing back from its 21-day moving average. Meta Platforms (META) surged by 7.1% to $539.91, clearing key buy points at $514.01 and $522.08. Palantir Technologies (PLTR) rose by 7.5% to $27.23, achieving its highest closing price since late 2021. ASML (ASML) climbed by 5.1% to $1,074.48, rebounding strongly from its 21-day moving average.

Market Outlook and Conclusion

Despite concerns about the Nasdaq’s extended valuation and challenges faced by small-cap and mid-cap stocks, leading stocks continue to exhibit robust performance, presenting ongoing opportunities for investors amidst market fluctuations. With earnings season in full swing, attention is on key reports from JPMorgan, Citigroup, Wells Fargo, and Delta Air Lines this week. Powell’s congressional testimony and forthcoming inflation data are likely to influence market sentiment, potentially supporting expectations for rate cuts in the near term.

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