Nasdaq Futures Climb After Tech-Led S&P 500 Pullback, ADP Jobs Report In Focus — Strategist Warns Of Potential H2 Dips

The U.S. market may resume its uptrend, with the index futures rising modestly early Wednesday.

Optimism over a resolution to the tariff crisis and the return of peace in the Middle East, along with positive earnings expectations and hopes for rate cuts, have helped keep trader sentiment upbeat. 

President Donald Trump, however, struck a defiant tone regarding his tariff deadline of July 9. Aboard Air Force One on Tuesday, he told reporters: “No, I’m not thinking about the pause. I’ll be writing letters to a lot of countries.”

The president also flagged a potential ceasefire between Israel and Hamas, although without divulging many details.

Trading volume could taper off ahead of the upcoming July 4 Independence Day holiday.

As of 12:34 a.m. ET on Wednesday, the Nasdaq 100 futures rose by over 0.30% and the small-cap-focused Russell 2000 Index jumped 0.50%. The Dow and S&P 500 futures added 0.19% and 0.24%, respectively.

The major averages closed Tuesday’s session on a mixed note, with the Dow Jones Industrial Average and the Russell 2000 Index advancing strongly, while the broader S&P 500 Index and the tech-focused Nasdaq Composite Index pulled back, weighed down by weakness in the communication services and IT spaces and as traders took some profit on recent gains.

Traders assessed the implications of some fairly strong economic data for interest rates and took stock of comments by Federal Reserve Chair Jerome Powell, who stuck to his “wait-and-watch” script. 

A sharp pullback in Tesla (TSLA) also weighed down on the consumer discretionary space, and in turn the market, as Elon Musk and Trump renewed their attacks against each other over the “one big, beautiful” tax bill.

The S&P 500 Index broke a two-session record run, ending the session down 0.11% at 6,198.01, off its all-time high of 6,215.08. 

The Invesco QQQ Trust (QQQ) ETF and the SPDR S&P 500 ETF (SPY) fell 0.84% and 0.03%, respectively. On the other hand, the SPDR Dow Jones Industrial Average ETF Trust (DIA) gained 0.96%, while the iShares Russell 2000 ETF (IWM) rallied 1.03%.

Commenting on the second-half outlook, LPL Financial Chief Technical Strategist Adam Turnquist warned investors against expecting a linear uptrend.

The strategist said the S&P 500 has followed up a positive first-half return with an average second-half gain of 6.1%. Additionally, when the first-half gains fell within the range of 5%-10%, the index posted an average increase of 6.1% in the second half, with 86% of occurrences producing positive results, he noted.

Turnquist said, “Despite the bullish precedent from a positive first half, bull markets are not linear, and pullbacks should be expected in the second half.”  He, however, noted that the maximum pullback in the second half has averaged 10.3% since 1950, with the second-half decline following 5%-10% gains in the preceding six months at a more modest 8.4%.

On Wednesday, the focus will likely be on ADP’s private payrolls data for June, which is widely expected to rebound to 100,000 compared to the 37,000 jobs added in May. 

The rally in crude oil futures stalled as they traded unchanged in the Asian session, while gold futures held around the $3,350 mark.

The 10-year Treasury note yield, which climbed to 4.25% on Tuesday on the back of the strong data, rose marginally. The dollar traded on a flattish note. 

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