U.S. Stock Market Outlook | Three Major Index Futures Mixed Ahead of "Little Non-Farm" Report

1. As of July 2nd (Wednesday) before the US stock market opens, the three major US stock index futures are mixed. As of the time of writing, Dow futures are up 0.19%, S&P 500 futures are up 0.10%, and Nasdaq futures are down 0.01%.

1. As of the time of writing, the German DAX index is up 0.17%, the UK FTSE 100 index is up 0.25%, the French CAC 40 index is up 1.08%, and the Euro Stoxx 50 index is up 0.53%.

1. As of the time of writing, WTI crude oil is up 0.89%, priced at $66.03 per barrel. Brent crude oil is up 0.89%, priced at $67.71 per barrel.

Market News

Tonight at 20:15, the "little non-farm" data is coming. This week, the US labor market will be the focus, with further factors driving market sentiment including easing geopolitical tensions in the Middle East, further progress in trade prospects, and the potential for the Federal Reserve to ease again in the third quarter, along with President Donald Trump's renewed hostility towards Federal Reserve Chairman Jerome Powell. Although concerns about a potential slowdown in the US economy have not dissipated, they seem to have been temporarily set aside for now. The ADP employment data, known as the "little non-farm," is coming, with the ADP Research Institute expected to release the June employment change report on Wednesday, exploring the dynamics of private sector job growth. The ADP employment change report for June is scheduled to be released tonight at 20:15 Beijing time, with a median estimate of an increase of 95,000 jobs, following a disappointing increase of only 37,000 jobs in May. If the ADP data exceeds expectations, it may alleviate concerns about a potential economic slowdown, thereby supporting the Federal Reserve's cautious stance.

A hot job market pressures rate cut expectations, and US Treasury yields rise for the second consecutive day. US Treasuries are expected to decline for the second consecutive day, following unexpectedly strong job vacancy data, as the market prepares for a dual test of labor data. The yield on the 10-year US Treasury rose 4 basis points to 4.28%, continuing to rise after hitting a two-month low on Tuesday. The more policy-sensitive two-year yield rose 2 basis points to 3.79%. As job vacancy data suggests rising economic heat, the market expects that today's ADP employment data and Thursday's non-farm payroll report may also be strong. "The latest data has tested recent dovish expectations," said Evelyne Gomez-Liechti, a strategist at Mizuho International. She believes the likelihood of a rate cut this month is extremely low, and a cut exceeding 25 basis points in September also seems far-fetched Wanshi Investment casts the decisive vote, Senate narrowly passes the "Big and Beautiful" bill, will the House of Representatives see a "breakthrough vote" again? The Republican senators in the U.S. Senate narrowly passed the "Big and Beautiful" bill, led by President Trump, on Tuesday. This comprehensive plan will significantly cut taxes, reduce social security programs, and increase military and immigration enforcement spending, while also leading to a $3.3 trillion increase in national debt. The bill has now been submitted to the House of Representatives for a final vote, but some Republican lawmakers have expressed opposition to certain provisions of the Senate version. Trump hopes to sign the bill into law before Independence Day on July 4, and House Speaker Mike Johnson stated that he will strive to complete the legislative process on time.

Tax credits for building factories in the U.S. rise to 35%! The "Big Beautiful Act" is expected to accelerate the "chip manufacturing return to the U.S." The U.S. government continues to push for the localization of the semiconductor industry, achieving a key breakthrough. The latest amendment to the bill passed by the Senate shows that the "Big Beautiful Act" industrial revitalization plan, promoted by the Trump administration, will significantly increase the tax credit rate for semiconductor companies building factories from 25% to 35%, further enhancing the previously proposed 30% plan. This policy adjustment is an extension of the 2022 CHIPS and Science Act, which aims to accelerate investment by global semiconductor giants in the U.S. through $39 billion in special appropriations and $75 billion in loans. According to the new regulations, companies like Intel (INTC.US), TSMC (TSM.US), and Micron Technology will be eligible for upgraded tax incentives if they complete the expansion of advanced manufacturing capacity in the U.S. by 2026.

Goldman Sachs warns: Non-farm payroll data may trigger a new round of dollar weakness, with the euro and yen likely to benefit. Goldman Sachs' latest research report points out that the upcoming U.S. June employment report may become a key turning point for the dollar's trend. If the data shows continued weakness in the labor market, it could further strengthen market expectations for the Federal Reserve to shift to a loose monetary policy, thereby putting downward pressure on the dollar. The current foreign exchange market is undergoing a significant transformation: as geopolitical tensions in the Middle East have notably eased, and domestic fiscal policy disputes in the U.S. (such as the controversy over Regulation 899 and tariff negotiations) have temporarily taken a back seat, traditional macroeconomic data has once again become the dominant factor driving exchange rate fluctuations.

Market ignores tariff deadline, supporting new highs in U.S. stocks, Wall Street bets on "Trump's last-minute retreat" strategy reappearing. Donald Trump's tariff suspension period will end on July 9, with very few agreements reached and little progress in negotiations. However, the stock market, which once experienced severe fluctuations due to trade news, now seems to disregard risks, with major stock indices hovering at historical highs and volatility dropping to a minimum. Part of the reason is that the market expects Trump to continue his usual pattern of "threatening tough measures followed by compromise," a strategy analysts have humorously dubbed "TACO" (Trump Always Comes Out). However, Wall Street professionals believe that in the current environment where the economy remains healthy and U.S. companies seem to be coping calmly with trade policies, it makes no sense to bet against the market. July 9 remains a focal point, but there are now too many factors for the market to consider, and investors are once again at ease: as long as interest rates, inflation, and unemployment do not surge, the stock market will continue to fluctuate upward

Individual Stock News

Jeff Bezos sells Amazon (AMZN.US) stock for the first time this year, cashing out $737 million. In recent days, Jeff Bezos sold 3.3 million shares of Amazon stock, cashing out $736.7 million. This sale is part of a 10b5-1 trading plan submitted by Bezos in March, which allows for the sale of up to 25 million shares of Amazon stock. Since then, Amazon's stock price has risen over 8% amid a general increase in the U.S. stock market. According to the Bloomberg Billionaires Index, the 61-year-old Bezos ranks as the third richest person in the world with a net worth of $241.4 billion. He frequently utilizes the 10b5-1 trading plan, having sold 7.5 million shares last year through this plan, totaling $13.6 billion in value. This plan allows company insiders to sell shares at predetermined times. According to data compiled by Bloomberg, Bezos has sold approximately $44 billion worth of Amazon stock since 2002.

Intel (INTC.US) makes drastic changes: plans to stop external sales of 18A process, betting on 14A advanced process to attract TSMC customers. According to insiders, Intel's new CEO Pat Gelsinger is planning a major strategic adjustment to its contract manufacturing business, attempting to secure large customer orders by focusing on more advanced process technologies. This plan sharply contrasts with the approach of former CEO Bob Swan and may expose the chip giant to billions of dollars in asset write-down risks. Since taking over in March, Gelsinger has initiated multiple rounds of cost-cutting measures. Insiders say that by June, his management team reached a new consensus: the 18A process technology, heavily invested in during Swan's tenure, has faced resistance in market promotion. The development of this process cost billions of dollars, and if Intel stops promoting it to external customers, it may be forced to undertake asset impairment of hundreds of millions to billions of dollars.

The "Inflation Reduction Act" eliminates consumption tax on wind and solar projects, leading to a surge in U.S. solar stocks. After several days of tense negotiations, the U.S. Senate passed the latest tax and spending bill from President Trump, with Republicans at the last minute removing the consumption tax on wind and solar projects. As a result of this news, U.S. solar stocks surged on Tuesday. By the close of U.S. markets on Tuesday, Shoals Technologies (SHLS.US) was up nearly 24%, Array Technologies (ARRY.US) rose nearly 13%, Sunrun (RUN.US) increased nearly 11%, Fluence Energy (FLNC.US) gained over 9%, SolarEdge Technologies (SEDG.US) rose over 7%, and Nextracker (NXT.US) was up nearly 6%.

The Mustang Mach-E sales suspension continues to unfold, with Ford (F.US) electric vehicle sales plunging over 30% in Q2. Ford's electric vehicle sales fell 31.4% in the second quarter. Previously, the automaker had ordered dealers to suspend sales of its electric Mustang Mach-E model due to safety concerns that could potentially lock passengers inside the vehicle. Ford stated that the decline in sales was primarily due to the suspension order for the Mach-E and inventory shortages of its two main electric vehicle models caused by factory shutdowns for upgrading the 2025 electric vehicle models Company spokesperson Said Deep stated, "Dealers have no cars to sell. The inventory of Mach-E, which is expected to be allowed for sale starting in July, will gradually recover." Dealers are eagerly awaiting Ford to fix the Mach-E's "door locking" defect—this issue could potentially trap children or pets inside the vehicle, and the company warns that "it could cause serious harm, especially in high-temperature weather."

After passing the stress tests, major Wall Street firms like Morgan Stanley (JPM.US) have raised their dividends. After passing this year's Federal Reserve stress tests, major Wall Street banks such as JPMorgan Chase, Goldman Sachs (GS.US), and Bank of America (BAC.US) have increased their dividends. Regulators relaxed some of the requirements set in previous years, making it easier for these banks to pass the stress tests. The annual review released by the Federal Reserve last week showed that all 22 banks under review had sufficient capital to withstand a hypothetical economic recession. Other large financial institutions, including Citigroup (C.US), Wells Fargo (WFC.US), and Morgan Stanley (MS.US), also raised their dividends. Additionally, JPMorgan's board approved a $50 billion stock buyback plan, while Morgan Stanley reauthorized a multi-year stock buyback plan totaling up to $20 billion, with no expiration date set.

Important Economic Data and Event Forecast

Beijing time 19:30: U.S. Challenger Job Cuts in June (10,000).

Beijing time 20:15: U.S. ADP Employment Change in June (10,000).

Beijing time 22:30: U.S. EIA Crude Oil Inventory Change for the week ending June 27 (10,000 barrels)