(June 30): US stocks were muted before the bell on Tuesday as the main indices zeroed in on their best quarter in six years and traders awaited the first set of key economic data due for the holiday-shortened week.
The S&P 500 Index rose 0.1% at 9:48am in New York, while the technology-heavy Nasdaq 100 Index rose 0.6%. Both gauges are likely to finish the session with their best quarter since June 2020.
“The second quarter has been dominated by stunning gains for chip stocks, and tech-heavy indices, a strengthening dollar that has sent the yen down to a 40-year low and shifting geopolitical risks that are playing out in commodity markets,” said Kathleen Brooks, research director at XTB.
The performance seen over the last three months has been fuelled by easing Middle East tensions and renewed enthusiasm around artificial intelligence. During the period, the S&P 500 put together a winning streak stretching over nine weeks.
However, the rally has sputtered toward the tail end of the quarter. Doubts around the AI trade have returned, with large capital spending plans and increasing likelihood for an interest-rate hike from the Federal Reserve pouring cold water on a previously relentless trade.
“The cessation of hostilities, rapidly declining oil prices and potential re-opening of the Strait, ameliorate the specter of rising inflation and temper the risks of second half rate hikes,” said Scott Klimo, chief investment officer at Saturna Capital. “Regardless, in a classic case of buy in anticipation and sell on the news, equity markets have become more volatile since the start of June, especially in the previously high-flying technology sector.”
See also: US stocks advance as jobs data dims prospect of Fed rate hike
Iran latest
Peace talks between the US and Iran are set to resume in Qatar on Tuesday after both sides agreed to halt a series of tit-for-tat attacks over the Strait of Hormuz. Iran has not confirmed details of a fresh round of negotiations.
However, the Islamic Republic has reiterated its determination to control maritime traffic through the critical waterway. That’s raised the stakes ahead of the talks in Doha.
See also: Most US stocks rise as Warsh says price risks fading
“While occasional reports of renewed friction have prompted brief moves in energy markets, investors continue to price in a relatively orderly reopening of the Strait of Hormuz and a gradual normalisation of global oil flows,” said Daniela Hathorn, senior market analyst at Capital.com.
Outside of Iran, traders are waiting for fresh consumer confidence data as well as new figures from the Bureau of Labor Statistics.
In terms of single-stock moves, AeroVironment Inc shares surged 20% after the defense company reported fourth-quarter results that topped expectations. Meanwhile, solar technology stocks rose on a report that a ban on foreign inverters is being drafted.
Concentrix Corp shares plunged 23% after the call-centre company slashed its full-year outlook.
Uploaded by Magessan Varatharaja
