Calm Before the Fireworks: Your July 03 Equity Futures Playbook

Market Overview & Sentiment News

• Tech & Retail Rally: U.S. stock futures are steady near record highs after a strong session on Wednesday. A surge in Tesla and Nike shares helped the S&P 500 and Nasdaq close at all-time highs, fueling bullish momentum heading into today.
• Tariff Relief Boost: A trade agreement between the United States and Vietnam eased tariff tensions, providing an overnight boost for global markets. The MSCI World and STOXX 600 indexes climbed on optimism from lower Vietnamese export tariffs.
• Jobs Data Caution: Equity futures are flat to slightly up ahead of Friday’s June Nonfarm Payrolls report at 8:30 AM ET. With the holiday-shortened session and early close at 1:00 PM ET, traders remain in a cautious wait-and-see mode.
• Chip Reprieve Rally: The U.S. lifted export curbs on chip design software to China, sparking premarket gains of over 5% in Synopsys and Cadence Design Systems and adding a tailwind to Nasdaq futures.
• Activist Investor Spark: TripAdvisor shares jumped 6% premarket after reports of activist fund involvement, reinforcing positive sentiment in consumer-related names.

Sources: Reuters, The Associated Press, MSCI, Reuters

Foundational Analysis

• Labor Market Signals: Anticipated slowdown in June job growth (around +110K jobs) and a slight uptick in unemployment to 4.3% signal a cooling labor market ahead of the report.
• Fed Stance: The Fed is holding rates steady in 2025, but a weak jobs print could shift expectations toward a rate cut as soon as the July FOMC meeting.
• Rate Cut Odds: Market-implied probability of a July rate cut has risen to 25%, with a downside surprise likely to push odds higher and support equities.
• Fiscal Policy Watch: Congress is close to approving a $3.3T tax-cut and spending bill, which may boost markets short term but pressure bond yields due to higher borrowing.
• Global Crosswinds: Stabilizing European bond yields, hopes for Chinese stimulus, and contained oil prices provide a cautiously positive backdrop for U.S. futures.

Technical Analysis

• ES (S&P 500 Futures): Strong gap up to 6,265, holding above VWAP (~6,252) with higher-lows; look for continuation toward 6,280 on pullbacks to VWAP.
• YM (Dow Futures): Sharp early surge from VWAP (~44,600) into 44,900, now in tight range; consider scalp fade toward VWAP or breakout plays above 44,925.
• GC (Gold Futures): Trading near session highs around 3,355 above VWAP (~3,345); favor long dips toward VWAP support targeting 3,365.
• NQ (Nasdaq 100 Futures): Under pressure after overnight sell-off, trading below VWAP (~22,650) near 22,620; prefer short setups at VWAP with stops above 22,650.
• RTY (Russell 2000 Futures): Continued uptrend above VWAP (~2,220), probing 2,235; look for long entries on pullbacks toward VWAP or consolidation breakouts.
• CL (Crude Oil Futures): Bullish momentum, making fresh highs above VWAP (~65.50) into 66.20; aggressive longs on dips toward VWAP with stops under 65.90.
• VWAP & Delta Themes: Commodity complex leading the move, tech showing fatigue; anchor scalps around VWAP bands and watch footprint deltas for entry signals.

Economic Events Analysis

• 07:00 AM – MBA 30‑Year Mortgage Rate: Rate eased to 6.88%, minor impact on equity futures; slight support for financials early on.
• 08:15 AM – ADP Employment Change: Came in at +37K vs 90K expected; soft print could trigger initial dips in ES and NQ, with mean-reversion scalps on VWAP.
• 10:30 AM – EIA Crude & Gasoline Stocks: Crude draw of -5.84M vs -2.26M forecast and gasoline draw of -2.08M vs +0.66M forecast; energy futures likely to extend gains, supporting energy equities.
• Fri (Jul 03), 08:30 AM – NFP Preview: Consensus 100K vs 139K prior; traders should position cautiously, using today’s ADP and inventory data to gauge risk into tomorrow’s release.

Source: Trading Economics Economic Calendar fileciteturn1file0

Today’s Strategy for Scalpers & What to Watch For

• Pre-Data Precautions: Light positions into 8:30 AM ET payrolls and claims; use tight stops to manage slippage.
• Post-NFP Knee-Jerk Play: After the jobs release, look for initial overreactions and scalp retracements back to VWAP or key intraday pivots.
• Mid-Morning Waves: Expect a second volatility burst at 10:00 AM ET (ISM Services PMI, Factory Orders). Plan quick breakout or fade trades with clear entry triggers.
• Fed Speech Risk: Bostic at 11:00 AM ET can spark small-range spikes—avoid directional exposure ahead of his remarks.
• Holiday Liquidity: Markets close early at 1:00 PM ET; target flat finishes by midday and avoid chasing moves in the thin late session.

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What Could Happen After Market Open

• Data-Driven Breakout: A weaker-than-expected jobs print could ignite a bullish surge as traders price in rate cuts, lifting equities and tech names.
• Hot Jobs, Cold Market: A stronger-than-expected payrolls number may trigger profit-taking, especially in high-valuation sectors, causing a post-open pullback.
• Rangebound Drift: In-line data will likely produce sideways action and moderate ranges in a holiday-shortened session.
• Late Session Fizzle: Activity will taper off into early afternoon; expect the last hour to be quiet unless a surprise headline emerges.

Summary

Equity futures stand near all-time highs amid easing trade tensions and strong tech performance, yet traders are poised for a volatility event around today’s payrolls report. Tactical long bias remains, provided key support levels in VWAP hold, but tight risk controls are essential given the holiday-shortened session and mixed macro signals.

Sources: Reuters, Bloomberg, Trading Economics, CME Group