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Published 19:59 IST, July 30th 2024

Wall Street awaits big tech earning, Fed decision; set for muted open

Investors are keenly watching Microsoft, a leader in the AI sector, which will report its quarterly results after market close.

Reported by: Business Desk
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Wall Street news: The S&P 500 and Nasdaq were poised for a modestly higher open on Tuesday as investors cautiously awaited Big Tech earnings and key labour data, alongside the Federal Reserve's policy decision later this week.

Market Movement and Expectations

At 8:39 a.m. ET (1239 GMT), S&P 500 e-minis futures were up 0.20 per cent, Dow e-minis were flat, and Nasdaq 100 e-minis were up 0.30 per cent. This follows last week's broad-based market sell-off driven by disappointing results from Tesla and higher expenditure forecasts from Alphabet.

Big Tech Earnings

Investors are keenly watching Microsoft, a leader in the AI sector, which will report its quarterly results after market close. Other major tech stocks, including Nvidia, Apple, Amazon.com, Meta, Alphabet, and Tesla, showed mixed performance in premarket trading, ranging from flat to 1.1 per cent higher.

"The bar is set high for these highly valued technology behemoths, which have spearheaded Wall Street's record-breaking run since the start of the year. Their quarterly results will be scrutinised for signs that they have the potential to induce further AI-led equity rallies," noted Scott Ladner, Chief Investment Officer at Horizon Investments.

Labour Market Data

A critical employment report is due after markets open. The Job Openings and Labour Turnover Survey (JOLTS) is expected to show 8 million job openings in June, down from 8.14 million in May. This data, along with Friday's Non-farm Payrolls reading, will help investors gauge the current state of the US labour market.

Federal Reserve Policy Decision

The recent improvement in inflation and an easing job market have bolstered expectations that the Federal Reserve might signal an interest-rate cut in September during its policy decision on Wednesday. According to CME's FedWatch Tool, the odds of a 25-basis-point cut are at 90 per cent. However, any hawkish commentary could negatively impact equities.

Expectations of early rate cuts have driven investors toward mid- and small-cap stocks, moving away from the dominant tech sector. The small-caps index is on track for its biggest monthly jump this year, set to outperform the three major US stock indexes. Futures tracking the Russell 2000 were up 0.30 per cent.

Benefiting from the rotation into underperforming sectors, the blue-chip Dow is also set for its best month so far in 2024.

(With Reuters inputs.)

Updated 19:59 IST, July 30th 2024