Wall Street is priming for a moderately lower opening on Tuesday after soft data helped the tech-heavy Nasdaq Composite close at another record high in the first trading session of the year’s second half. The market is currently at the mercy of two catalysts – interest rate and earnings outlook, LPL Chief Investment Officer John Lynch. Therefore, traders may focus on each incoming evidence to make sense of its implication for rates.

In Tuesday’s session, the spotlight is likely to be on bond yields, the results of the JOLTS report and monthly sales from automakers, including Tesla, Inc. (NASDAQ:TSLA). Federal Reserve Chairman Jerome Powell’s speech could be another closely-watched catalyst.

The Institute for Supply Management’s manufacturing purchasing managers’ survey report for June came in weaker than expected, with many readings from the report vouching for a slowdown in growth and easing inflationary pressure. The positive sentiment generated by the weak data was offset to some extent by a surge in bond yields. After some volatility in early trading, the Nasdaq Composite and the S&P 500 Index remained mostly above the unchanged line before closing higher.

The Dow Jones Industrial Average, which started solidly, gave back most of its early gain and yet remained mostly in the green throughout the session. The 30-stock average ended the day modestly higher. On the other hand, small caps ended notably lower.

Consumer discretionary and IT stocks contributed to much of the strength, while industrial, material and real-estate stocks served as the biggest drags.

Insights From Analysts:

Fund manager Louis Navellier said he expects earnings to continue to support market upside. He noted that when the first half of the year is strong, the second half follows through higher 75% of the time. He also pointed to optimistic earnings estimates. S&P 500 earnings are expected to rise 8.6% in the third quarter and 15% in the fourth quarter, he added.

Delving into the near to mid-term catalysts, Wharton professor and Senior Economist to WisdomTree Jeremy Siegel said all eyes are on the Fed’s upcoming meetings and subsequent economic data releases. He sees the probability of the first Fed rate cut in the current monetary policy cycle to come in September, contingent on inflation continuing to moderate. “There is still an upward tilt to the equity market,” he added.

Upcoming Economic Data:

• Fed Chair Powell is scheduled to speak in Portugal at 9:30 a.m. EDT.
• The Bureau of Labor Statistics will release the results of its Job Openings and Labor Turnover Survey at 10 a.m. EDT, with economists, on average, calling for job openings to come in at 7.960 million in May, down from 8.059 million in April.

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Stocks In Focus:

• Tesla fell close to 2% in premarket trading ahead of its deliveries update.
• Paramount Global (NASDAQ:PARA) climbed about 4% after the New York Times reported that billionaire Barry Diller is considering a bid to take over the studio after it pulled out of a merger with Skydance Media.
• AI stalwart Nvidia Corp. (NASDAQ:NVDA) and peer Advanced Micro Devices, Inc. (NASDAQ:AMD) fell in the premarket.

Commodities, Bonds And Global Equity Markets:

Crude oil futures rose above the $84-a-barrel mark for the first time since late April, while gold futures retreated. The benchmark 10-year Treasury’s yield slid 2.6 points to 4.452% after moving tantalizingly close to the 4.5% level on Monday. Bitcoin (CRYPTO: BTC) flatlined around the $62.5K mark.

The stock markets in Asia closed on a mixed note, while European stocks were firmly in the red in early trading. The weaker sentiment in Europe can be traced back to the eurozone June inflation report, which showed headline inflation edging down from May. The annual core inflation rate, however, remained unchanged.

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