What is going on with NASDAQ futures

The NASDAQ futures market is exhibiting a cautious sentiment ahead of a series of key economic data releases and corporate earnings reports. Here's a detailed analysis:

1. Market Sentiment: The market is adopting a cautious stance, as evidenced by the decline in September S&P 500 E-Mini futures (ESU24) and September Nasdaq 100 E-Mini futures (NQU2024) before the open. This cautiousness is likely due to the anticipation of important economic data and earnings reports.
2. Recent Market Performance: The NASDAQ 100 suffered its largest single-day percentage drop since October 2022, with Tesla TSLA plunging over -12% and Alphabet GOOGL slumping more than -5% after reporting disappointing earnings. This underperformance of mega tech stocks is affecting market sentiment.
3. Economic Data: The U.S. S&P Global manufacturing PMI unexpectedly fell to 49.5 in July, weaker than expectations, and U.S. June new home sales also fell short of expectations. These weaker-than-expected data could be contributing to the cautious market sentiment.
4. Rate Cut Expectations: U.S. rate futures have priced in a high probability of a rate cut, which could be influencing investor behavior. The anticipation of rate cuts often leads to a more cautious approach as investors wait for confirmation of such cuts.
5. Upcoming Earnings: Notable companies like AbbVie ABBV, Union Pacific UNP, Northrop Grumman NOC, and others are scheduled to release their quarterly results today. The market is likely hesitant until these reports are out, as they can significantly impact investor sentiment.
6. Key GDP Data: The focus is on the first estimate of U.S. second-quarter gross domestic product, with economists forecasting a growth of +2.0% q/q. This data will be crucial in shaping market perceptions of the U.S. economic health.
7. Market Volatility: The volatility in the market is evident from the recent plunge in Tesla's stock, which was the top percentage loser on the Nasdaq 100 after reporting weaker-than-expected Q2 adjusted EPS and postponing its Robotaxi event. This volatility is a reflection of the uncertainty among investors.

In summary, the NASDAQ futures market is exhibiting a cautious sentiment due to a combination of underwhelming earnings reports, disappointing economic data, and expectations of rate cuts. Investors are eagerly awaiting key economic data and corporate earnings reports to gauge the health of the economy and make informed investment decisions.