Dow Jones tipped to reach new highs, while Nasdaq called lower pre-NFP report

• Caterpillar plunged 7% after Burry's disclosure, with its valuation at 37 times forward earnings compared to an industry average of 15 times, highlighting concerns about AI-related stock overvaluation
• The sell-off rippled globally with South Korea's Kospi tumbling 8%, while WTI crude fell more than 2% to $67 per barrel, the lowest since late February
• Fed chair Kevin Warsh's hawkish stance continues to pressure markets, with Treasury yields climbing as he promises 'a good family fight' at this month's policy meeting to restore price stability

Market Summary: Mixed Pre-NFP Trading Ahead of Holiday Weekend

Market Performance:

US stock futures showed mixed signals on Thursday, July 2, 2026, with Dow Jones futures up 0.2%, S&P 500 flat, and Nasdaq futures down 0.3%. This followed Wednesday's session where the Nasdaq fell 0.7% to 26,040.03, the S&P 500 declined 0.2% to 7,483.23, and the Dow edged down 0.03% to 52,305.24 after hitting an intraday record above 52,742.

Key Catalyst:

Caterpillar shares plunged 7% after investor Michael Burry disclosed a bearish position, wiping 437 points off the Dow. The stock had become an AI proxy play due to its exposure to data center construction, but trades at 37x forward earnings versus the industry average of 15x. The sell-off rippled across semiconductor and AI-related stocks and into Asian markets, with South Korea's Kospi tumbling 8%.

Commodities and Currency:

WTI crude fell over 2% to just above $67 per barrel, its lowest since late February, following reports of progress on Strait of Hormuz shipping. The dollar weakened, with the DXY index falling below 101, as the Japanese yen gained amid speculation of potential Tokyo currency intervention during the US holiday.

Critical Data Ahead:

June non-farm payrolls, released Thursday at 8:30am ET (brought forward due to the Independence Day weekend), are expected to show 110,000 jobs added versus 172,000 in May, with unemployment forecast to hold at 4.3%. The ISM prices paid index came in below forecasts, indicating easing manufacturing cost pressures.

Fed Policy:

Markets are navigating expectations for Fed policy after Chair Kevin Warsh reiterated commitment to price stability, promising "a good family fight" at the upcoming policy meeting.