U.S. stocks look set to start the fresh week on a positive note, unperturbed by elevated valuations they have amassed, especially the mega-caps. The index futures were mostly higher in early trading, reacting to the potential removal of uncertainty on the political front. Odds of a victory for presumptive Republican candidate Donald Trump spiked higher after Saturday’s shooting incident at a campaign rally in Pennsylvania.

Traders may pay attention to a regional manufacturing reading and Federal Reserve Chairman Jerome Powell’s speech. Earnings from a couple of key names from the financial space could also evince interest.

Futures	Performance (+/-)
Nasdaq 100	+0.49%
S&P 500	+0.42%
Dow	+0.55%
R2K	+1.02%

Cues From Last Week:

Wall Street went about a volatile ride in the week ended July 12 before ending higher. Small-caps outshone their bigger counterparts after Powell soothed nerves with his “seemingly” dovish comments and the June inflation report that showed further thawing in pricing pressure. However, its wholesale counterpart did not turn out to be as benign.

The Nasdaq Composite and the S&P 500 indices clocked records ahead of Thursday’s consumer price inflation report but made a contrarian move by pulling back sharply despite the tame numbers. On Friday, the averages came back up despite the producer price inflation surprising to the upside.

The Dow Jones Industrial Average, which underperformed the other two major averages, and the Russell 2,000 Index rose for three straight sessions, starting Wednesday. The former reclaimed the 40,000 mark for the first time since mid-May and hit an intra-day high but closed just shy of its all-time closing record of 40,003.59.

Index	Performance (+/-)	Value
Nasdaq Composite	+0.25%	18,398.45
S&P 500 Index	+0.87%	5,615.35
Dow Industrials	+1.59%	40,000.90
Russell 2000	+6.00%	2,148.27

Carson Group Chief Market Strategist Ryan Detrick is confident of the rally continuing. He noted that the Russell 2,000 outperformed the Russell 1,000, an index comprising large-caps, by more than 3% on July 11. This happened previously during the lows in 1987, October 2008, October 2011, March 2020 and November 2021.

“All super bullish times. In fact, S&P 500 higher yr later every time and up avg 32%,” he noted.

Upcoming Economic Data:

The week’s Main Street events are headlined by a few manufacturing readings, the June retail sales report and several Fed speeches, including the one from Powell.

• The New York Fed is due to release the results of its Empire Manufacturing survey for July at 8:30 a.m. EDT. Economists, on average, expect the business conditions index for July to come in at -6, the same as in June. A negative reading denotes contraction in activity.
• The Treasury will auction three- and six-month bills at 11:30 a.m. EDT.
• Powell is due to make a public appearance at 12 p.m. EDT.

Stocks In Focus:

• Trump Media & Technology Group Corp. DJT soared over 50% following increasing odds of a victory for former President Donald Trump
• Crypto-linked stocks such as Coinbase Global, Inc. COIN rallied on the back of a rise in cryptocurrencies.
• Solar stocks Sunrun Inc. RUN and First Solar, Inc. FSLR all fell sharply amid rising prospects of Trump emerging victorious.
• Goldman Sachs Group, Inc. GS and BlackRock, Inc. BLK are among the companies due to announce their quarterly results before the market opens.

Commodities, Bonds And Global Equity Markets:

Crude oil futures fell for a second straight session and traded under $81 and gold futures edged down, while the 10-year Treasury note yield rose 3.7 points to 4.223%.

Bitcoin BTC/USD advanced strongly, adding to its weekend gains and traded up over 4% at around the $62.6K level.

In Asia, stocks reacted to the Trump shooting incident on a mixed note. The Hong Kong market fell sharply, while the Chinese market recovered from early weakness and ended slightly higher.

A batch of economic data released from China painted a gloomy picture of the domestic economy. Second-quarter GDP rose at slower-than-expected rates both on a year-over-year and sequential basis and June retail sales growth was much slower than expectations.

The Japanese market remained closed for a public holiday.

European stocks started on a negative note.

Stocks Photo by WHYFRAME on Shutterstock