As the second quarter of 2023 draws to a close, stock futures showed a slight increase, pointing towards solid gains in the market. Futures for the Dow Jones Industrial Average rose by 99 points, equivalent to a 0.3% increase. Similarly, S&P 500 futures saw a 0.3% rise, while Nasdaq-100 futures experienced a 0.4% jump.
Micron Technology, a chipmaker, witnessed a 3% rise in its shares after reporting higher-than-expected revenue for the latest quarter, citing increased industry demand. In premarket trading, JPMorgan Chase and Bank of America, two of the country’s largest lenders, gained 1% as they successfully passed the Federal Reserve’s annual stress test.
As the stock market approaches the end of the first half of 2023, it has displayed strong performance. The S&P 500 has seen a 14% increase this year, while the Nasdaq Composite, driven by rising optimism around artificial intelligence, has surged nearly 30%, heading towards its best first half since 1983. The Dow, however, has underperformed with a modest 2% increase this year. Many analysts are predicting a potentially volatile second half.
Jason Draho, head of asset allocation Americas at UBS Global Wealth Management, commented on the market conditions, stating, “The Fed, the data, and the AI story all having to go right for equities to go higher since the S&P 500 is already priced for a near-perfect landing, while anything going wrong could lead to a downturn.”
Federal Reserve Chair Jerome Powell’s recent comments on the tightening cycle were digested by investors, causing the S&P 500 to close near the flatline on Wednesday. Powell emphasized that more restrictive policies are still to come as the Fed continues its fight against inflation, including the possibility of consecutive interest rate hikes in future meetings.
Investors are eagerly awaiting Powell’s further comments on Thursday as he is scheduled to speak at a conference in Madrid, where he will engage in a discussion with Bank of Spain Governor Pablo Hernández de Cos. The event is set to take place at 2:30 a.m. ET.
In addition, traders will closely monitor the weekly jobless claims data on Thursday morning to assess the state of the labor market.
With a 4.7% increase in June, the S&P 500 is on track for its strongest monthly performance since January. In the second quarter, the benchmark index has gained 6.5%, positioning it for its third consecutive positive quarter.