U.S. stock index futures fell slightly in evening deals on Tuesday, with heavyweight technology stocks seeing a sustained pullback before key earnings from the sector due this week.
Strong earnings, increased optimism over the U.S. economy and bets on lower interest rates also saw traders pivoting out of heavyweight tech stocks and into more economically sensitive sectors.
S&P 500 Futures fell 0.1% to 5,713.25 points, while Nasdaq 100 Futures fell 0.2% to 20,567.50 points by 19:37 ET (23:37 GMT). Dow Jones Futures rose slightly to 41,266.0 points.
Focus also remained squarely on the 2024 presidential race after an attempt on Donald Trump’s life over the weekend.
ASML, TSMC earnings on tap this week
Dutch lithography equipment maker ASML Holding (AS: ASML) NV (NASDAQ: ASML) and Taiwanese contract chipmaker TSMC (NYSE: TSM) are set to report their quarterly earnings on Wednesday and Thursday, respectively.
Both firms are considered bellwethers for the chipmaking industry, with their earnings set to offer more cues on demand from artificial intelligence.
The hype over AI was a key driver of Wall Street’s rally over the past year, with technology stocks such as NVIDIA Corporation (NASDAQ: NVDA) leading a major spike in valuation.
But this rally has somewhat cooled in recent sessions, with the upcoming earnings set to offer more signals for trade.
Tech stocks were also pressured by traders collecting some profits in the sector and pivoting into more economically sensitive sectors.
Dow clocks best day in over a year on strong earnings, rate cut hopes
The Dow Jones Industrial Average vastly outpaced its peers in recent sessions, surging 1.9% to a record closing high of 40,954.48 points on Tuesday. The S&P 500 rose 0.6% to a record high of 5,666.98 points, while the tech-heavy NASDAQ Composite lagged, rising 0.2% to 18,510.86 points.
Strength on Wall Street was driven by a slew of strong earnings from big banks and insurers.
The earnings season is set to continue on Wednesday, with majors such as Johnson&Johnson (NYSE: JNJ), U.S. Bancorp (NYSE: USB), United Airlines Holdings Inc (NASDAQ: UAL), Equifax Inc (NYSE: EFX) and Prologis Inc (NYSE: PLD) set to report.
Optimism over interest rate cuts also boosted U.S. stocks, as soft inflation readings and dovish-leaning comments from the Federal Reserve ratcheted up bets that the central bank will begin cutting rates from September.
Traders are pricing in a 91.7% chance the Fed will cut rates by 25 basis points in September, and a small chance for a 50 basis point cut, according to CME Fedwatch.
Stronger-than-expected retail sales data did little to deter bets on interest rate cuts.
