US pre-open: Futures in the red ahead of final day of trading for Q2

Wall Street stocks were in the red ahead of the bell on Wednesday but major indices were still on track to close out a winning first half and second quarter.

As of 1220 BST, Dow Jones futures were down 0.12%, while S&P 500 and Nasdaq-100 futures were 0.07% and 0.01% lower, respectively.

The Dow closed 9.02 points higher on Tuesday, doing little to reverse losses recorded in the previous session.

Despite the modest losses indicated by the futures, Wall Street stocks were tracking towards a solid first half on the final day of trading for Q2. The first half gains were mostly driven by a rapid reopening of the US economy as over 60% of adults have now received their Covid-19 vaccine.

AvaTrade's Naeem Aslam said: "US stock futures are trading lower with stock markets poised to end the first half of 2021 on a high note. The Dow and Nasdaq composite have both gained nearly 12% in the first six months, while the S & P 500 has gained 14%. In the hopes of a quick economic recovery, investors have brushed off concerns about high inflation and continued to invest in stock markets, pushing indices to new highs.

"The stock markets are unlikely to see large fluctuations as investors await the jobs report on Friday, which could shed some light on the economy's future outlook and the direction that monetary policy can take."

On the macro front, mortgage applications fell 6.9% in the week ended 25 June, according to the Mortgage Bankers Association, the largest drop since early February, as record-high home price appreciation sidelined many buyers.

Applications to refinance existing loans dropped 8.2% and applications to purchase a home slid 4.8% week-on-week as the average contract interest rate for traditional 30-year mortgages increased to 3.20% from 3.18% the prior week.

Still to come, ADP employment change figures for June will be published at 1315 BST, June's Chicago PMI will follow at 1445 BST and pending home sales for May will be released at 1500 BST.

In the corporate space, Bed Bath and Beyond, Constellation Brands and General Mills were all slated to report earnings before the bell, while Micron Technology will issue an update after the close.