US stocks fell on Tuesday led by a drop in shares of AI chip heavyweight Nvidia (NVDA) as investors awaited key earnings from the likes of Microsoft (MSFT) and AMD (AMD).
The S&P 500 (^GSPC) fell 0.4% while the tech-heavy Nasdaq Composite (^IXIC) dropped roughly 1%, on the heels of a lackluster session for the major gauges. The Dow Jones Industrial Average (^DJI) clung onto slight gains.
Stocks are in the midst of a potentially pivotal week featuring the Fed’s decision, the July jobs report, and results from four of the “Magnificent Seven” megacaps. All will be crucial for investors wondering whether the recent stock pullback is over, as they weigh high expectations for interest-rate cuts against concerns that Big Techs have lost their mojo.
Semiconductor stocks lagged on Tuesday, with shares of Nvidia dropping as much as 6% during the session.
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. It’s especially in focus after July’s volatile ride for stocks underlined the risks of the AI trade, as investors rotated out of Big Tech and into small caps.
Pharmaceuticals Merck (MRK) and Pfizer (PFE) posted quarterly results prior to the market open, as well as consumer products giant Procter & Gamble (PG). Coffee-shop chain Starbucks (SBUX) will report after the market close, as will chip giant AMD (AMD).
A notable theme has emerged this earnings season — a willingness by investors to support companies that post weak results but outline a turn in their business coming soon.
Read more: 32 charts that tell the story of markets and the economy right now
Meanwhile, 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.
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Nasdaq losses accelerate, down 1%
Losses on the tech-heavy Nasdaq Composite (^IXIC) accelerated mid-morning as semiconductor stocks fell. Shares of AI chip heavyweight Nvidia (NVDA) fell as much as 6%.
Other semi stocks also fell ahead of chip giant AMD (AMD) earnings, due after the market close.
The Nasdaq Composite fell more than 1% while the S&P 500 (^GSPC) dropped 0.5%.
Shares of semiconductor stocks fell on Tuesday, dragging on the Nasdaq Composite -
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