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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)
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