Nasdaq, S&P 500, Dow Futures Rise After Fourth Of July Break As Investors Await Fed Minutes: SLS, ONDS, HOOD, MARA, HUT In Focus

• The Q2 earnings season is set to begin full throttle next week as major U.S. banks start reporting quarterly results from July 14. 
• However, the highlight of the week will be the minutes from the Federal Reserve’s June meeting, set to be released on Wednesday. 
• Crude oil prices retreated late Sunday as markets closely watched developments between the US and Iran.

U.S. stock futures climbed higher in the overnight session late Sunday, extending the previous week’s rally as investors await the Federal Reserve’s June minutes due on Wednesday.

Nasdaq 100 futures jumped 1.33%, S&P 500 futures climbed 0.53%, while Dow futures were up 0.15%  at 8:11 PM EDT.  

Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY), the Invesco QQQ Trust (QQQ) and the SPDR Dow Jones Industrial Average ETF Trust (DIA) were all trading higher at the time of writing, with sentiment in green.

The iShares 20+ Year Treasury Bond ETF (TLT) was trading down 0.09% amid ‘bearish’ sentiment.

How Did US Markets Fare On Thursday?

The benchmark indexes closed mixed on Thursday last week. U.S. stock and bond markets were closed on Friday, July 3, in observance of Independence Day.

The Dow Jones Industrial Average jumped to record highs, adding nearly 600 points to close up 1.14%. The S&P 500 was flat at the end of the trading session, white the Nasdaq lost more than 200 points to close down 0.8%.

However, all three indexes closed in the green for the week, climbing about 2% each.

US Market Drivers

U.S. stock markets are poised to start off the week strong, extending last week’s rally as markets gear up for the second-quarter (Q2) earnings season.

PepsiCo. (PEP) quarterly results are expected on Thursday, while Delta Air Lines (DAL) will follow suit on Friday. The broader Q2 earnings season will begin full throttle next week as major U.S. banks start reporting from July 14.

However, the highlight of the week will be the minutes from the Federal Reserve’s June meeting, set to be released on Wednesday. This was Kevin Warsh’s first meeting as Fed Chair. The central bank held the key interest rates steady at 3.5% to 3.75%.

Meanwhile, a softer-than-expected jobs report and Warsh’s unwillingness to provide cues about the central bank's policy path going forward at the ECB Forum in Sintra, Portugal, have lowered market expectations for a July rate hike. According to data from the CME FedWatch tool, the possibility of the Fed holding rates steady is at 78.1%, while odds of a rate hike are at 21.9%.

U.S. payrolls released last week rose by 57,000 in June, missing Wall Street expectations. Meanwhile, Warsh did not provide any clear signals about the central bank’s policy decisions in the meeting later this month, although he highlighted “high” inflation and added that policymakers will have a "good debate" when they meet in four weeks.

"I think it's going to be interesting to see how the discussion went around the table, how incrementally hawkish are they leaning," said Matthew Miskin, co-chief investment strategist at Manulife John Hancock Investments, reportedly told Reuters.

"That's what investors ‌and markets ⁠are going to be wondering: What is this new Fed chairman and updated (Fed policymaking body) looking for to decide the path of rates from here?" Miskin added.

Meanwhile, on the geopolitical front, millions mourned the death of Iran’s former leader Ali Khamenei at his funeral. The flow of ships through the Strait of Hormuz is reportedly tightening again as Tehran seeks to get a stronger hold on the critical waterways.

At least eight ships turned around on Saturday after IRGC issued warnings, according to a report from The Guardian, with flow thinning even further on Sunday.

Trending Stocks To Watch

SELLAS Life Sciences Group Inc. (SLS): The biotech company jumped onto the retail radar as a key acute myeloid leukemia (AML) trial nears its final readout. Shares of the company closed up nearly 13% on Thursday but were edging lower in the overnight session on Sunday.

Ondas Inc. (ONDS): The defense company is garnering attention amid a high short interest, which has surged to nearly a third of the company’s total float at 31.70%, according to Koyfin data.

Robinhood Markets Inc. (HOOD): The brokerage firm jumped nearly 3% higher on Thursday and continued to climb in the overnight session on Sunday amid a flurry of positive catalysts for the company, including announcements from its ‘World Is Flat’ event and a price target update from Mizuho.

Marathon Digital Holdings Inc. (MARA) and Hut 8 Corp. (HUT) are garnering increased attention amid the shift from Bitcoin mining to AI infrastructure companies.

Global Market Trends

Crude oil prices retreated late Sunday as markets closely watched developments between the US and Iran. At the time of writing, Brent crude futures expiring in August were down about 0.42%, trading at around $71.82 per barrel. Meanwhile, WTI crude futures expiring in August fell by about 0.28% to $68.50 per barrel.

Yields on the 10-year Treasury were at 4.479% at the time of writing, while spot gold prices rose to around $4,184.52 an ounce.

Asian markets largely traded higher at the open on Monday. South Korea's KOSPI, China’s SSE Composite index and Japan’s Nikkei 225 all edged higher at the time of writing. However, Australian stocks were trading lower at the open.

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