Morning Wrap: ASX 200 to fall, Nasdaq hits record high on Nvidia rally

ASX 200 futures are down 37pts (-0.43%) as of 8:30 am AEST.

In a nutshell:

• The Nasdaq 100 hit a record high and the S&P 500 finished flat, but the Equal-weight S&P 500 tumbled 0.72%, signaling weak breadth

• Relatively uneventful overnight session as attention shifted from Middle East tensions to looming reciprocal tariff deadline

• Nvidia shares rallied 4.3%, overtaking Microsoft as the world's most valuable company (again)

Let's dive in.

S&P 500 SESSION CHART

S&P 500 flat but off opening levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks mostly lower, giving up early gains in a narrow trading range

• Breadth was negative, with the Equal-weight S&P 500 underperforming the official benchmark by 72 bps 

• No major directional drivers, with Middle East tensions fading from focus and attention shifting to 9-Jul reciprocal tariff deadline 

• Negative breadth likely driven by a profit warning from economic bellwether FedEx (-3.2%) – which said its profit will be weaker-than-expected this quarter and declined to offer guidance for the rest of the year due to Trump’s trade war and soft demand

• Nvidia (+4.3%) shares hit all-time high, making its return as the world’s most valuable company

• Nasdaq 100 hits record for first time since Feb, driven by robust fundamentals an easing geopolitical tensions (BBG)

• US stocks need profit boom or Fed cuts to justify current levels (BBG)

• Goldman Sachs sees risks stacking up for lower-quality stocks, says rally driven by short sellers, not fundamentals (BBG)

• Traders boost bets for 10-year yield falling back to 4% (BBG)

STOCKS

• FedEx guides earnings below expectations, reflecting tariff-driven demand uncertainty (BBG)

• 40% of CFOs say in survey they've postponed or canceled capital spending due to tariff worries (AX)

• Tesla's EU sales slump continues for fifth month in a row (FT)

• Bumble to cut 30% of staff, raises second quarter outlook (WSJ)

• Constellation Energy's plans to restart the Three Mile Island plant are moving faster than expected (YF)

• US banking mergers expected to accelerate as regulators become more favorable and competition intensifies (FT)

• China's BYD slows production and expansion, amid rising inventory and market challenges (RT)

CENTRAL BANKS

• Fed Chair Powell signals no rush to cut rates, says future trade deals may allow Fed to consider rate cuts (BBG)

• BOJ Tamura remains confident in rate hikes despite uncertainties (BBG)

 GEOPOLITICS

• Israel-Iran fragile ceasefire appears to hold after Trump outburst at both sides, both sides also claiming victory in the war (BBG)

• Trump says he will speak with Iran next week and may sign potential nuclear deal, dismisses intelligence leak (FT)

• US strikes on Iran nuclear facilities dealt limited damage (BBG)

• Trump hails NATO's defense spending increase to 5% of GDP but avoids mentioning Article 5 commitment (BBG)

• China vows to retaliate against Taiwan's "technological blockades" after blacklisting Chinese companies like Huawei (BBG)

TARIFFS

• Trump's team nearing trade deals with Japan, South Korea, and Vietnam, sources say (X)

• Trump administration defends tariff power, urges to federal appeals court to overturn decision finding levies unconstitutional (BBG)

• Trump threatens to double tariffs on Spain due to low NATO spending (AX)

• US and Mexico negotiating on quota system to reduce tariffs on limited volume of steel imports (BBG)

• EU retaliatory tariffs on US goods could include Boeing jets (BBG)

ECONOMY

• US foreign direct investment sharply declines to $52.8bn amid uncertainty over Trump's tariff plans (RT)

• Australia monthly inflation cools to 2.1% vs. 2.3% consensus, bolsters market expectations of July rate cut (BBG)

ASX TODAY

Be sure to check out our Live Blog for the latest coverage and analysis for company announcements, market movements and economic updates.

• ALS share purchase plan raises $22.5m at $16.51 a share vs. original target of $40m (ALQ)

• Chalice provides Gonneville update, says pre-feasibility study on track for the fourth quarter of 2025, plans to submit environmental review mid-2026 (CHN)

• GenusPlus guides FY25 normalised organic EBITDA growth of 28-32% year-on-year vs. prior guidance of at least 20% (GNP)

WHAT TO WATCH TODAY

• Weakness under the hood: The Nasdaq might be powering its way to new highs but the Equal-weight S&P 500 tumbled 0.72%, signalling broader market weakness (eight out of 11 US sectors finished lower). Citi's Economic Surprise Index has slumped to the lowest level since Sep-24 after the latest string of weaker-than-expected updates, suggesting a potential economic slowdown ahead. ASX futures are pointing towards a negative start, but there's nothing wrong with some weakness after the recent two-day bounce.

• More on breadth: Our overnight ETF watchlist highlights poor breadth, with most closing lower. Even as the Nasdaq hit record highs, the Cloud and Fintech ETF both finished around ~1% lower. Uranium and Nickel led to the downside, while Silver and Rare Earths were slightly positive.

BROKER MOVES

• Still waiting for Thursday's batch to come through. Check out the Live Blog for updates

Stocks trading ex-dividend: 

• Thu 26 Jun: None

• Fri 27 June: Arena REIT (ARF) – $0.046, Centuria Capital Group (CNI) – $0.052, Centuria Industrial REIT (CIP) – $0.041, Centuria Office REIT (COF) – $0.025, Charter Hall Long Wale REIT (CLW) – $0.063, Charter Hall Retail REIT (CQR) – $0.124, Charter Hall Social Infrastructure REIT (CQE) – $0.038, Digico Infrastructure REIT (DGT) – $0.109, Homeco Daily Needs REIT (HDN) – $0.021, National Storage REIT (NSR) – $0.056, Region Group (RGN) – $0.07, Rural Funds Group (RFF) – $0.029, Waypoint REIT (WPR) – $0.041

Other ASX corporate actions today: 

• Dividends paid: Tower (TWR)

• Earnings: None

• IPOs: None 

• AGMs: The Star Entertainment (SGR)

Economic calendar (AEST):

• 4:00 pm: Germany Consumer Confidence (Jul)

• 10:30 pm: US Durable Goods Orders (May)

• 10:30 pm: US GDP Final (Q1)