Morning in New York: Business Activity Takes Center Stage

A daily review and forecast of events in the U.S. stock market by Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

Participants in the upcoming trading sessions will be focusing on the June services sector Purchasing Managers’ Index (PMI) data from S&P Global Services and ISM Services (consensus: 51.9 and 54 points, respectively; May: 51.3 and 54.5). If the actual data exceed these benchmarks, it could reinforce expectations that tight monetary conditions will persist. Otherwise, there will be additional grounds to forecast a easing of monetary policy in the U.S.

Investors are also awaiting remarks by Federal Reserve Board member Christopher Waller, hoping to gain further insight into the path of interest rates following a weaker-than-expected June jobs report.

OPEC+ members agreed to increase production quotas by another 188,000 barrels per day starting in August. This increase in supply is accompanied by a gradual resumption of shipments through the Strait of Hormuz following the de-escalation of the conflict between the U.S. and Iran. An additional positive factor was the agreement between the United Kingdom, France, and Oman to jointly ensure the safety of shipping in the region. A further decline in the geopolitical premium on oil prices could support a disinflationary scenario.

S&P 500 futures are showing positive momentum. We assess the risk balance for the upcoming session as neutral, with moderate volatility. Uncertainty stems from the aforementioned expected macroeconomic data and statements from regulators. These negative factors are partially offset by falling oil prices and the de-escalation of the conflict in the Middle East.

— Lockheed Martin (LMT) shares are rising on news that the company is the frontrunner in the race to acquire Ultra Maritime, a company specializing in anti-submarine technology, radar systems, and electronic warfare capabilities, for approximately $3.5 billion. The deal could be one of the largest acquisitions of the year in the defense sector.

— SK Hynix is launching a Nasdaq listing worth approximately $29 billion, which could be the largest IPO in the technology sector in recent years. The company plans to offer approximately 17.79 million American Depositary Receipts (ADRs). The proceeds will be used to expand production of HBM memory chips and other AI solutions.

— Uber (UBER) shares may come under pressure following reports that the company has shifted its focus to negotiations to acquire Delivery Hero, abandoning plans to launch Uber Eats in five of the seven European countries where it had previously planned to do so.

— Foxconn’s revenue rose nearly 40% year-over-year in the second quarter, driven by strong demand for AI servers. However, the company’s warning about geopolitical risks could heighten investor focus on the resilience of NVIDIA’s (NVDA) supply chains.

Trading on July 2 on U.S. stock markets ended with mixed results. The S&P 500 remained virtually unchanged, while the NASDAQ 100 fell 1.61%, the Dow Jones rose 1.14%, and the Russell 2000 lost 0.55%. Profit-taking in semiconductor stocks and major tech companies continued to put pressure on prices. Capital flowed actively into defensive sectors. Among the “Magnificent Seven,” Meta Platforms (META: -4.90% at the close on July 2) and Tesla (TSLA: -7.49%) were the underperformers. Overall, the broader market appeared significantly more resilient: the S&P 500, which is equally weighted, set a new all-time high.

The healthcare sector (XLV: +2.63%) led the gains, while the IT sector (XLK: -2.71%) led the losses.

The Labor Department’s June report came in weaker than expected. Nonfarm payrolls rose by only 57,000, compared with a consensus estimate of around 110,000, and the May figure was significantly revised downward. The decline in the unemployment rate to 4.2% was largely driven by a drop in the labor force participation rate to its lowest level since March 2021. The number of initial claims for unemployment benefits was slightly above average.

Mary Daly, president of the Federal Reserve Bank of San Francisco, stated that large-scale investments in artificial intelligence infrastructure are creating additional uncertainty regarding the Fed's future policy.

In the coming days, the investment community’s attention will be focused on the start of the second-quarter earnings season. As in the previous earnings season, earnings forecasts for S&P 500 companies call for growth of more than 20%.

— AeroVironment (AVAV: +10.7% at the close of trading on July 2) was awarded a $500 million contract to provide counter-UAV solutions to the U.S. Army.

— Rivian (RIVN: +8.4%) reported second-quarter production of 12,600 vehicles and deliveries of 12,200. The forecast for the latter figure for 2026 has been raised. Investors reacted positively to the production momentum for the EDV and R1 platforms, as well as the progress in developing the R2 platform.

— Apple (AAPL: +4.8%) is in talks to purchase memory chips from Chinese suppliers CXMT and YMTC. The risks to finalizing these contracts stem from the fact that these manufacturers are on the Pentagon’s blacklist.

— The amount of withdrawal requests received by Blue Owl Capital (OWL: +4.6%) from its flagship direct lending funds fell to $4.7 billion from April through June, compared with $5.4 billion in the first three months of 2026.

— Tesla (TSLA: -7.49%) delivered more than 480,000 vehicles in the second quarter, exceeding the consensus estimate of about 406,000.

This article was AI-translated and verified by a human editor