U.S. stock index futures slipped on Tuesday ahead of results from some Big Tech companies expected later in the day that will be parsed to see whether the market’s recent record-breaking run is sustainable. With investors returning to megacap growth stocks on Monday, the S&P 500 and the Nasdaq snapped a three-day losing streak and logged their biggest one-day gain in more than a month. The two main indexes have pulled back recently following a record rally as investors exited Big Tech stocks in favor of underperforming sections of the market. Results from Big Tech companies will be key to determine whether U.S. stocks are overvalued or have more room for growth. Alphabet and Tesla, two of the so-called “Magnificent Seven” are set to report quarterly results after market close. Both the shares were up around 0.3% each in a largely mixed premarket session for the group of stocks. AI chip firm Nvidia dropped 0.8% after logging its steepest one-day gain in nearly a month during Monday’s session. After U.S. President Joe Biden withdrew from his reelection campaign and Vice President Kamala Harris has become the Democrat party’s presumed nominee, focus moves to the quarterly earnings season for clues on the health of corporate America amid decades-high interest rates. Other companies reporting results before the bell include General Motors, United Parcel Service, Coca-Cola and Philip Morris International. Of the 74 S&P 500 companies that have reported quarterly results during this earnings season, 81.1% beat expectations, according to LSEG data. Economic data scheduled for this week, including the personal consumption expenditures (PCE) price index, the Fed’s preferred inflation gauge, will be key in assessing the monetary policy outlook amid the recent downtrend in inflation and signs of an easing labor market. Bets of a 25-basis point interest rate cut by September have shot up to nearly 92% from the near 60% seen last month, according to CME’s FedWatch Tool, with two rate cuts seen by the year end. At 5:17 a.m. ET, Dow e-minis were down 4 points, or 0.01%, S&P 500 e-minis were down 8.25 points, or 0.15%, and Nasdaq 100 e-minis were down 63 points, or 0.31%. NXP Semiconductors slumped 9% after the company forecast third-quarter revenue below estimates as it battles sluggish demand from automotive customers. Other chip stocks including ON Semiconductor, Texas Instruments and Advanced Micro Devices were also down between 1.2% and 3.6%. (Reporting by Ankika Biswas in Bengaluru; Editing by Shounak Dasgupta)
Footnotes:
– https://finance.yahoo.com/news/futures-dip-focus-moves-tech-101007728.html