Stock futures dipped Wednesday morning to pull back from record levels, as traders looked ahead to more economic data on the labor market recovery.
Contracts on the S&P 500 and Nasdaq were each off slightly after the indexes set record levels yet again during Tuesday’s regular trading day. Dow futures also declined.
The major U.S. stock indexes have moved only modestly so far this week, hovering at or near record levels while traders await more catalysts to push equities higher. Many have pointed to the prospects of another batch of strong corporate earnings results as a likely source of upcoming strength, given the firming economic backdrop as pandemic risks in the U.S. recede further.
On Wednesday, traders will get an update on the labor market in the form of ADP’s June private payrolls report, which is expected to further underscore the ongoing economic recovery with a sixth straight monthly increase in employment.
Consumer confidence has also risen and pointed to Americans’ increased propensity to spend, with the Conference Board’s consumer confidence index racing to the highest level since February 2020 in June.
“If you look at what’s really been powering the economy and powering the stock market, it’s been the fact that there’s been so much fiscal stimulus pour into the economy,” David Lefkowitz, UBS Global Wealth Management head of equities for the Americas told Yahoo Finance. “What’s really crucial though is that a lot of that fiscal stimulus has actually not been spent year. It’s sitting on the balance sheets of consumers.”
“It’s a lot of dry powder for continued gains in the economy, and that translates into good news for corporate profits down the road,” he added.
Wednesday’s session also marks the final day of trading for the month of June, the second quarter, and the first half of 2021. In the S&P 500, the real estate, information technology and communication services sectors have come in at the top-performers for the March through June quarter, and only the utilities sector is on track to end the quarter lower. For the year-to-date through Tuesday’s close, the S&P 500 has increased 14.3%, the Nasdaq by 12.7% and the Dow by 12%.
Other asset classes have posted more mixed performances. The 10-year Treasury yield hit a year-to-date peak of 1.77% in March but is on track to end the quarter yielding just under 1.5%. West Texas intermediate crude oil has 23%, with the rebound in energy prices coinciding with a pick-up in energy demand and fast-improving travel trends. Cryptocurrencies, however, have had a tougher second quarter, and Bitcoin has tumbled from around $59,000 at the end of March to around $36,000 as of Tuesday, albeit while still being up significantly over a multi-year horizon.
“One of the big calls we’ve made is, stocks will outperform bonds, and that’s one of the big ways we’re constructing our portfolios,” Ryan Detrick, LPL Financial chief market strategist, told Yahoo Finance. “We still think that’s the play, that stocks will probably do better than bonds the second half of this year as the economy continues to improve, open up, and it’ll be led by those earnings which will justify pretty pricey multiples.”
—
7:23 a.m. ET Wednesday: Stock futures dip ahead of private payrolls data
Here’s where markets were trading Wednesday morning:
-
S&P 500 futures (ES=F): 4,280.00, -2 points (-0.05%)
-
Dow futures (YM=F): 34,142.00, -28.00 points (-0.08%)
-
Nasdaq futures (NQ=F): 14,562.50, -0.5 points (-0.00%)
-
Crude (CL=F): +$1.01 (+1.38%) to $73.99 a barrel
-
Gold (GC=F): -$4.00 (-0.23%) to $1,759.60 per ounce
-
10-year Treasury (^TNX): -2.4 bps to yield 1.456%
—
6:15 p.m. ET Tuesday: Stock futures pull back slightly
Here’s where markets were trading into the overnight session on Tuesday:
-
S&P 500 futures (ES=F): 4,284.50, +2.5 points (+0.06%)
-
Dow futures (YM=F): 34,180.00, +10 points (+0.03%)
-
Nasdaq futures (NQ=F): 14,578.25, +15.25 points (+0.1%)
—
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
