U.S. stock futures mixed as Tesla bounce boosts Nasdaq

What’s driving markets

Moves in stock futures are minimal, with fresh market catalysts a bit thin on the ground early Monday, and the motivation to trade further denuded by the New York Stock Exchange and the Nasdaq closing at 1 p.m. Eastern ahead of Tuesday’s Independence Day holiday.

“As we kick off July, U.S. Independence Day tomorrow will ensure a stop start week but it remains a big one with U.S. payrolls (Friday) and the global PMIs and U.S. ISMs through the week,” said Jim Reid, strategist at Deutsche Bank.

Investors may be excused for taking a pause after a strong first half of 2023.

The Nasdaq Composite rose 31.7% in the first six months of the year, helped by hopes the economy has not been too badly damaged by the Federal Reserve’s sharp increase in borrowing costs as it battled to push inflation down from a multi-decade high of 9.1% a year ago to the current 4%.

Large cap technology stocks, like Apple
AAPL,
+2.31%,
Microsoft
MSFT,
+1.64%
and Nvidia
NVDA,
+3.63%
have led the way. The Nasdaq 100 has jumped nearly 40%, adding nearly $5 trillion of value, according to Bloomberg.

And Nasdaq 100 futures are outperforming slightly on Monday as Tesla shares gain more than 6% in premarket trading after the EV maker announced over the weekend higher than expected sales.

Long-time bull Tom Lee reckons the market has further to rally. In his mid-year outlook note, the Fundstrat head of research has raised his year-end S&P 500 target from 4750 to 4825, citing expectations that inflation can fall faster, allowing for a dovish Fed pivot, and that the economy is “sliding into expansion” that will help earnings rise.

U.S. economic updates set for release on Monday include the S&P flash manufacturing PMI for June at 9:45 a.m. and the ISM manufacturing report at 10 a.m. alongside construction spending for May.