Stocks Fall Ahead of Fed Policy Meeting and Big Tech Earnings

Stocks took a hit just ahead of a pivotal Fed policy meeting and a slew of Big Tech quarterly reports, with US stocks falling on Tuesday. The dip was largely fueled by a drop in AI chip heavyweight Nvidia (NVDA), which saw its shares plummet by 7%.

The S&P 500 fell by 0.5%, while the tech-heavy Nasdaq Composite dropped approximately 1.3%. On the other hand, the Dow Jones Industrial Average rose by 0.5%. Investors are eagerly awaiting key earnings reports from tech giants such as Microsoft (MSFT) and AMD (AMD).

This week is shaping up to be significant, with the Fed’s interest-rate decision, the release of the July jobs report, and earnings from four of the “Magnificent Seven” megacaps on the docket. All eyes are on these updates as investors try to gauge whether the recent stock pullback is coming to an end.

Semiconductor stocks, particularly Nvidia, lagged behind on Tuesday, raising concerns about the future of AI-driven technology. As companies like Microsoft, Apple, Amazon, and Meta prepare to release their earnings, the focus is on whether massive AI investments will start to pay off.

Notably, Starbucks and chip giant AMD are set to report after the market close, adding to the anticipation surrounding Big Tech’s performance. Despite AI-related anxieties, investors are showing a willingness to support companies that indicate a potential turnaround in their business.

Meanwhile, the Fed kicked off its July policy meeting, with policymakers not expected to make any changes to borrowing costs at this time. The central bank is likely laying the groundwork for a rate cut in September, with market debate revolving around the timing and number of cuts needed this year.

With so much at stake in the coming days, from earnings reports to central bank decisions, the stock market remains in a state of flux as investors navigate through a volatile landscape. Stay tuned for more updates as the week unfolds.