U.S. stocks fell, dragged down by a drop in shares of AI chip maker Nvidia (NVDA), ahead of a key Federal Reserve policy meeting and quarterly earnings reports from major tech companies.
The S&P 500 (^GSPC) fell 0.5% and the tech-heavy Nasdaq Composite Index (^IXIC) lost about 1.3% as investors awaited major earnings reports from the likes of Microsoft (MSFT) and AMD (AMD). The Dow Jones Industrial Average (^DJI) rose 0.5%.
The stock market is in the midst of a pivotal week that sees the Fed’s interest rate decision, the July jobs report, and results from four of the “Magnificent Seven” large-cap stocks. All of this will be crucial for investors wondering whether the recent sell-off is over as they weigh hopes of a rate cut against worries that big tech companies have lost their AI-driven magic.
Semiconductor stocks were weak on Tuesday, with Nvidia shares down 7% at the closing bell.
All eyes are now on Microsoft’s quarterly report, which will be released after the close of trading and will provide the basis for the results of Apple (AAPL), Amazon (AMZN) and Meta (META) in the coming days.
That question has come into focus as Wall Street watches for signs that big AI bets are starting to pay off, after investors shifted money from big tech companies to smaller stocks and a volatile July stock market that highlighted the risks of AI trading.
Coffee shop chain Starbucks (SBUX) and semiconductor giant AMD are scheduled to report earnings after the market closes.
Despite the worries about AI, a notable theme has emerged this earnings season: investors’ willingness to back underperforming companies that signal a turnaround is on the horizon.
Read more: 32 charts that tell the story of today’s markets and economy
Meanwhile, the Federal Reserve began its July policy meeting on Tuesday. Policymakers are not expected to make any changes to borrowing costs on Wednesday, but they will be setting the stage for a rate cut in September. After strong inflation data in June, market discussions have focused on the timing and number of rate cuts this year.
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Tuesday, July 30, 2024 at 1:02 PM PDT
Stock prices fall ahead of Federal Reserve policy decision and earnings announcements from major IT companies
U.S. stocks fell, dragged down by a drop in shares of AI chip maker Nvidia (NVDA), ahead of a key Federal Reserve policy meeting and quarterly earnings reports from major tech companies.
The S&P 500 (^GSPC) fell 0.5% and the tech-heavy Nasdaq Composite Index (^IXIC) dropped roughly 1.3% as investors awaited major earnings reports from the likes of Microsoft (MSFT) and AMD (AMD). The Dow Jones Industrial Average (^DJI) rose 0.5%.
Tuesday, July 30, 2024 at 12:30 PM PDT
Focus on the Federal Reserve
The big day is just around the corner, or at least the big day before the big day.
Wednesday’s Fed policy meeting may be the last before officials decide to cut interest rates, but as in past meetings, Fed Chairman Jerome Powell’s subtle comments are likely to only hint at where things are headed rather than lay out a direct roadmap.
It’s significant for Federal Reserve officials to have to consider both sides of that dual mission.
“The Fed is trying to strike a balance, perfectly timing its rate cuts to shepherd a soft landing without rekindling inflationary pressures,” said Seema Shah, chief global strategist at Principal Asset Management. “To be sure, uncertainty around the final stretch of stubborn, persistent inflation complicates the Fed’s decision-making.”
Policy makers are expected to keep rates on hold at the end of their July meeting, but Wednesday’s message is likely to set the stage for a cut in September. After strong inflation readings in June, market discussions have focused on the timing and number of rate cuts this year.
Tuesday, July 30, 2024 at 12:00 PM PDT
Meta to report results prioritizing ad sales and AI spending
Facebook and Instagram parent company META will report second-quarter results after the close of trading on Wednesday, with the performance of the company’s AI spending and advertising business expected to be in the spotlight.
AI spending is a key metric for Wall Street as investors eagerly await returns on big tech companies’ tech investments, reports Daniel Howley of Yahoo Finance. Last quarter, Meta CFO Susan Li raised the company’s full-year total expense estimate to between $96 billion and $99 billion from between $94 billion and $99 billion.
While Meta’s ad revenue is expected to grow, that doesn’t mean every aspect of the company’s earnings report will be positive, as Wall Street is still trying to determine how long it will take for tech companies to start seeing any bottom-line results from investing in AI.
Last week, CEO Mark Zuckerberg announced Meta’s latest open source large-scale language model (LLM), Llama 3.1. Additionally, the Facebook founder said the industry should focus on open source AI instead of closed source models like OpenAI’s ChatGPT.
Tuesday, July 30, 2024 at 11:24 AM PDT
Meth to pay $1.4 billion to Texas to settle facial recognition lawsuit
Meta agreed to pay $1.4 billion to settle a lawsuit with Texas that alleged it violated Texas law by using biometric data without users’ consent.
Texas Attorney General Ken Paxton said the settlement is the largest secured by a single state, and it follows a 2021 agreement in which the company, as it was known, paid $650 million to settle similar claims in Illinois.
“We are pleased to have resolved this matter and look forward to exploring future opportunities to deepen our business investments in Texas, including data center development,” Mehta said in a statement.
The lawsuit stems from Facebook’s facial recognition system, which previously defaulted to recognizing users but was later changed to ask users whether they wanted to use the feature.
Meta’s shares fell less than 1% on Tuesday, following a broader decline in technology stocks. The company is due to report earnings on Wednesday.
Tuesday, July 30, 2024 at 10:30 AM PDT
Stocks rise in afternoon trading
Below are some of the stocks that led Yahoo Finance’s trending ticker page during Tuesday afternoon trading.
Nvidia (NVDA): The AI darling pulled down semiconductor stocks, leading the tech sector lower with its shares down 6% on Tuesday afternoon. Investors rallied ahead of earnings reports from big tech companies, with Microsoft and AMD due to report earnings after the close.
CrowdStrike (CRWD): The effects of the cybersecurity company’s outage earlier this month continue to weigh on its stock price. CrowdStrike shares fell 11% on Tuesday after a CNBC report said Delta Air Lines was seeking damages from the company and Microsoft stemming from the global IT outage.
PayPal (PYPL): Shares of the payments company rose about 8% after the company reported second-quarter earnings that beat expectations on both revenue and profit. The company reported revenue of $7.89 billion, beating expectations of $7.82 billion. Adjusted earnings per share also beat expectations, coming in at $1.19 compared to analysts’ expectations of $1.00.
JetBlue (JBLU): Shares rose more than 16% on Tuesday after the airline reported second-quarter profit of $25 million and management unveiled a new cost-cutting strategy to turn around the business.
Tuesday, July 30, 2024 at 9:45 AM PDT
Stocks fell in afternoon trading
The tech slump continued into Tuesday afternoon, with many of the biggest companies dropping, dragging the broader market down with them.
The two major indexes fell ahead of earnings reports from big technology companies this week and a key Federal Reserve policy meeting that concludes on Wednesday.
The S&P 500 (^GSPC) fell 0.7%, while the tech-heavy Nasdaq Composite Index (^IXIC) dropped 1.4%. The Dow Jones Industrial Average (^DJI), less impacted by the tech decline, rose about 0.3%.
Tuesday, July 30, 2024 at 9:00 AM PDT
The US national debt has surpassed a new milestone of $35 trillion.
Yahoo Finance’s Ben Warschl reports, “The U.S. national debt has breached the psychologically significant milestone of $35 trillion in recent days, up $1 trillion since January and adding nearly $5 billion each day so far in 2025.”
That latest barrier was officially breached last Friday. The Treasury Department’s daily tally, compiled and released late Monday, showed total debt at $35.1278 trillion.
“This is crazy,” Tesla (TSLA) CEO Elon Musk said in a swift response to the news in an X post.
The U.S. deficit has increased by more than 75% between the Trump and Biden administrations, but the issue has been put on the back burner during the 2024 election cycle.
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Tuesday, July 30, 2024 at 8:14 a.m. PDT
Nasdaq’s decline accelerates, down 1%
The tech-heavy Nasdaq Composite Index (^IXIC) saw its losses accelerate mid-morning as semiconductor stocks fell, with AI chip maker Nvidia (NVDA) shares dropping 6%.
Other semiconductor stocks also fell ahead of chip giant AMD’s (AMD) earnings report, which is due to be released after the market close.
The Nasdaq Composite Index fell more than 1%, while the S&P 500 (^GSPC) dropped 0.5%.
Semiconductor stocks fell on Tuesday, weighing on the Nasdaq Composite Index.
Tuesday, July 30, 2024 at 7:45 AM PDT
Nasdaq turns negative, Nvidia falls 4%
The Nasdaq turned negative on Tuesday morning as shares of AI chip giant Nvidia (NVDA) fell about 4%.
The tech-heavy Nasdaq Composite Index (^IXIC) fell 0.5%, erasing the previous day’s gains, while the S&P 500 Index (^GSPC) also fell below flat.
Other semiconductor-related stocks fell on Tuesday as investors waited for chip giant AMD ( AMD ) to report its quarterly earnings after the close.
Tuesday, July 30, 2024 at 7:10 a.m. PDT
Job openings remain steady in June, while job losses are at lowest level since November 2020
Job openings were little changed in June, down slightly from the previous month, as investors watched for signs of further cooling in the labor market.
New data released Tuesday by the Bureau of Labor Statistics showed there were 8.18 million job openings at the end of June, down from 8.23 million in May.
The May figure was revised up from an initially reported figure of 8.14 million job openings. Economists surveyed by Bloomberg had expected the June report to show 8 million job openings.
According to the Job Openings and Labor Turnover Survey (JOLTS), 5.3 million jobs were added during the month, down slightly from May. The employment rate fell to 3.4% from 3.6% in May.
Also reported on Tuesday was the job separation rate, a gauge of worker confidence, which rose to 2.1% for the second straight month. The 3.28 million people who left the workforce in June was the lowest monthly figure since November 2020.
Tuesday, July 30, 2024 at 6:32 a.m. PDT
Stocks rise ahead of Federal Reserve meeting as investors await Microsoft earnings
Stocks rose on Tuesday morning as investors digested further gains and Federal Reserve officials were set to begin a two-day policy meeting.
The S&P 500 (^GSPC) rose 0.2% and the tech-heavy Nasdaq Composite Index (^IXIC) added 0.3% after a weak performance in the major indexes the previous trading day. The Dow Jones Industrial Average (^DJI) rose 0.2%.
Pfizer (PFE) raised its full-year outlook, and Merck (MRK) beat second-quarter profit expectations.
Investors will be keeping an eye on Microsoft’s (MSFT) quarterly results, which are due to be released after the market close on Tuesday. Coffee giant Starbucks (SBUX) is also scheduled to report results after the close.
This is a big week for markets, with the Federal Open Market Committee meeting for two days and an interest rate decision scheduled for Wednesday afternoon, as investors expect Fed officials to prepare for a rate cut in September.
Meanwhile, the monthly employment report is due to be released before the market opens on Friday.
