Tech stocks stumble as Big Tech giants prepare to report earnings
As the U.S. stock market continues to navigate through a volatile period, tech stocks, particularly Big Tech giants, are facing scrutiny as they prepare to report their earnings this week.
Helping to offset some losses in the market was ON Semiconductor, which saw a 12.1% jump after reporting stronger profits for the spring than analysts had expected. McDonald’s also rose 3.9% after initially flipping a loss, reporting profits and revenue for the latest quarter that fell slightly short of forecasts.
However, the focus remains on the upcoming earnings reports from major players such as Microsoft, Apple, Amazon, and Meta Platforms. These companies, known for their significant market value, are closely watched by investors and analysts alike.
The recent slowdown in the momentum of Big Tech stocks has been attributed to concerns over their high valuations and the emergence of more attractive alternatives in the market. Profit reports from Tesla and Alphabet last week, which failed to impress investors, have added to these concerns.
While Big Tech stocks have been struggling, other areas of the market, particularly smaller stocks, have been performing well. Expectations of the Federal Reserve cutting interest rates soon have boosted smaller stocks, with the Russell 2000 index up by 9.3% for the month so far.
The upcoming policy meeting of the Federal Reserve on interest rates this week is eagerly awaited, with many expecting a move to ease rates in September. The yield on the 10-year Treasury has slipped slightly, indicating a cautious approach by investors.
Internationally, stock markets in Japan, Hong Kong, and Shanghai have shown mixed performances, with central banks in these regions also set to announce decisions on interest rates. In London, the FTSE 100 edged up ahead of a meeting for the Bank of England, where some investors anticipate a cut in interest rates.
As the market awaits the earnings reports from Big Tech giants and the decisions on interest rates from central banks, investors are bracing for further volatility and potential shifts in market dynamics.
