Morning in New York: investors turned on risk-on mode

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

Market participants continue to follow the development of the situation in the Middle East. The ceasefire between Israel and Iran continues, no new shelling from either side has been recorded since yesterday evening. At the same time, there were reports that the US attacks on Iran's nuclear infrastructure may have been less effective than initially announced. In the absence of signs of a new escalation, the upcoming sessions may take place in a more stable environment with inertial optimism.

The day before, the Nasdaq 100 updated its record. Exchange players now expect the S&P 500 to reach a new high in the near future. The main positive driver is the news related to AI. Optimistic expectations are linked to the upcoming Micron Technology (MU) report. If its results exceed very high forecasts, the S&P 500 will have a reason to rise to 6150 points. Nevertheless, the technical picture on the broad market index signals the need for caution.

Today will be released data on sales of new homes in the United States for May. Bloomberg consensus assumes a decline in the indicator to 694 thousand (-6.7% m/m) after 743 thousand in April (+10.9% m/m). Head of the Fed Jerome Powell will continue to address the Congress with a scheduled report, but the speaker is unlikely to outline new guidelines for the course of monetary policy.

General Mills (GIS) will report before the open, with Micron Technology (MU) and Jefferies Financial Group (JEF) reporting results after the main session.

Futures on American indices show about zero dynamics. The balance of risks remains neutral. We estimate the level of volatility for the upcoming trades as average. We focus on S&P 500 movements in the range of 6050-6140 points (from -0.7% to +0.7% of the previous session's closing level).

- FedEx (FDX) reported quarterly earnings and revenue above expectations. Management updated its cost-cutting targets: the company intends to save another $1 bln in the next fiscal year. Nevertheless, the profit forecast for the current quarter disappointed the market, on this background FDX securities lost about 6% after the end of the main trades.

- BlackBerry (BB) improved its full-year revenue guidance, counting on stable demand for cybersecurity services. The company raised guidance for both total revenue and its secure communications business. BB stock added about 7% in the postmarket despite generally weak quarterly results.

- QuantumScape (QS) has announced a technological breakthrough - the integration of its Cobra process into mainstream solid-state battery manufacturing. According to the company's CEO, the new technology is 25 times faster than the previous technology and requires significantly less manufacturing capacity. The company's shares jumped more than 30% in extended trading.

- Tesla's (TSLA) sales in Europe fell by another 27.9% YoY in May, despite a 27.2% growth in the electric car segment. The company's market share in the region dropped to 1.2%, and the updated Model Y is not yet attracting interest among buyers due to high competition from Chinese manufacturers.

- BYD (BYDDY) has cut car production at a number of Chinese factories due to slowing sales growth and inventory accumulation. The company canceled night shifts and suspended the launch of new lines. Its production in April and May grew by only 13% and 0.2% y/y respectively. This is the slowest pace in the last year and a half.

- AeroVironment (AVAV) results beat analysts' expectations. The company's management reaffirmed its positive demand outlook and stated plans to continue to improve profitability and grow revenue in fiscal 2026.

June 24 trading on American stock exchanges ended in a steady plus. S&P 500 added 1.11%, Nasdaq 100 rose by 1.53%, Dow Jones rose by 1.19%, Russell 2000 - by 1.34%. The main positive drivers were the de-escalation of the armed conflict between Israel and Iran, including signs of a sustainable ceasefire, as well as the statement of the President of the Islamic Republic on the readiness to resolve the contradictions with the U.S. diplomatically.

 The Magnificent Seven were led by Nvidia (NVDA: +2.59%) and Amazon (AMZN: +2%), while Tesla (TSLA: -2.35%) lagged well behind the market. The technology sector (XLK: +1.8%) was the strongest performer on the back of a rally in semiconductor and digital platform stocks. Outsiders were oil and gas companies (XLE: -1.3%), pressure on their quotations was exerted by a 6% drop in WTI oil prices to the levels of the beginning of the conflict in the Middle East.

The Conference Board Consumer Confidence Index in June unexpectedly fell from 98 to 93 points with a consensus of 99.8. Assessments of the current situation and labor market conditions, as well as expectations deteriorated. At the same time, inflation guidance for the year ahead declined from 6.4% to 6%.

Fed Chairman Jerome Powell delivered his semi-annual report to Congress, confirming that the regulator is taking a wait-and-see stance due to uncertainty about the impact of import tariffs on inflation. Powell reiterated that the Fed is ready for a rate cut, but will act as macro data becomes available and assessed. The Fed Chairman's comments were complemented by statements of Atlanta FRB President Raphael Bostic on the need to maintain the current rate, the words of his Cleveland colleague Elizabeth Hammack on the proximity of the rate to a neutral level and the statement of New York FRB Chairman John Williams, who called the pause justified.

- Amid the launch of a robotaxi service in Atlanta integrated with the Waymo platform, the securities of Uber Technologies (UBER: +7.5%) were in notable demand. The new driverless cab service is available in 65 square miles.

- Carnival shares (CCL: +6.9%) posted strong gains following the release of strong quarterly results, which included record gross margins and strong demand for cruises with near-term sailing dates. The company also raised its net revenue and earnings guidance for the year.

- News of a partnership aimed at integrating stablecoins into mainstream payments was welcomed positively, which helped Mastercard (MA: +2.8%) shares end the session in the positive.

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