Stocks Lose Ground Ahead of Fed Policy Decision and Big Tech Earnings
Just ahead of a pivotal Fed policy meeting and a clutch of Big Tech quarterly reports, US stocks fell, dragged by a drop of AI chip heavyweight Nvidia (NVDA). The S&P 500 (^GSPC) fell by 0.5% while the tech-heavy Nasdaq Composite (^IXIC) dropped roughly 1.3%, as investors awaited key earnings from the likes of Microsoft (MSFT) and AMD (AMD). The Dow Jones Industrial Average (^DJI) rose 0.5%.
Semiconductor Stocks Lag as Investors Await Big Tech Earnings
Semiconductor stocks lagged on Tuesday, with shares of Nvidia dropping 7% at the closing bell. Investors recoiled ahead of major tech company earnings, with Microsoft and AMD on deck to report after the closing bell.
Eyes on Microsoft’s Quarterly Report
Eyes are now on Microsoft’s quarterly report due after trading ends, which will set the stage for results from Apple (AAPL), Amazon (AMZN), and Meta (META) in the following days. Wall Street is watching closely for any sign that massive AI investments are starting to pay off.
Fed Meeting Preview
The Fed began its July policy meeting on Tuesday. Policymakers are expected to bring no change in borrowing costs on Wednesday, but to lay the groundwork for a rate cut in September. After encouraging June inflation data, the market debate now centers on the timing and number of cuts this year.
Stocks Trending in Afternoon Trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page during afternoon trading on Tuesday:
- Nvidia (NVDA): The AI darling dragged down semiconductor stocks and led the losses in the tech sector as shares sank as 6% Tuesday afternoon.
- CrowdStrike (CRWD): The fallout from the cybersecurity company’s outage earlier this month continues to impact the stock price.
- PayPal (PYPL): Shares of the payments company are up almost 8% after reporting second quarter earnings that beat expectations on both revenue and profit.
- JetBlue (JBLU): The airline rose more than 16% Tuesday after reporting a $25 million profit for the second quarter and as company executives unveiled a new cost-cutting strategy to rebuild the business.
Hot Take:
The Fed meeting is a high-stakes event that can make or break the stock market. If the Fed delivers a rate cut, it could be the catalyst for a major rally. On the other hand, if the Fed decides to hold steady or raise interest rates, it could lead to a significant sell-off. One thing is certain, the Fed meeting is an event that investors cannot afford to miss.
Analysis:
The market is pricing in a rate cut, and we think the Fed will deliver. With Big Tech reporting strong earnings, the bulls will come out on top. It’s time to get long the market!
