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S&P 500 dips from a record with Big Tech earnings on deck

S&P 500 dips from a record with Big Tech earnings on deck

27 Jul 2021

Stock futures fell in early trading Tuesday ahead of quarterly earnings reports from several megacap technology companies.

Futures on the Dow Jones Industrial Average declined 100 points. S&P 500 futures slipped 0.2% and Nasdaq 100 futures traded flat. The major U.S. stock averages closed the previous session at record highs to each notch five-day win streaks.

Shares of Tesla rose about 2.3% in premarket trading following a better-than-expected second-quarter earnings report. The electric vehicle maker passed $1 billion in quarterly net income for the first time.

Second-quarter earnings season continues with Google-parent Alphabet, Microsoft and Apple set to report after the bell Tuesday.

“It appears that we’re going to get really solid earnings from these companies and that should give a little bit of a boost to the market. Some of these names have already run so much this year that perhaps we don’t get a large bounce,” said Victoria Fernandez, Crossmark Global Investments’ chief market strategist.

“Apple may be your best opportunity to see some movement because they’ve been in more of a consolidation phase over the last few months,” Fernandez added.

Shares of UPS tumbled more than 6% in premarket trading as its domestic revenue came up shy of estimates. The shipping company beat on the top and bottom lines, however, as a surge in e-commerce orders continued.

Hong Kong markets saw yet another day of heavy losses Tuesday, with the Hang Seng index dropping more than 4% amid Beijing’s intensified crackdown on tech and education companies.

The Federal Reserve’s two-day policy meeting begins Tuesday. Investors are awaiting insights into the central bank’s monetary policy.

The Federal Open Market Committee will release a statement when the meeting concludes Wednesday, followed by Chairman Jerome Powell’s news conference.

“I empathize with Fed Chair Jay Powell as he walks a delicate tightrope — preparing markets for tapering while assuring that the Fed will be very patient and thoughtful as it starts its normalization process,” Invesco Chief Global Market Strategist Kristina Hooper said in a note.