Dow Jones Futures: Fed Rate Pivot Looms; Tech Giants' AI Comments Key

Dow Jones futures volition unfastened Sunday evening, on with S&P 500 futures and Nasdaq futures. AI tech titans Apple (AAPL), Microsoft (MSFT), Meta Platforms (META) and Amazon.com (AMZN) header a monolithic week of earnings. The Federal Reserve this week is expected to awesome that complaint cuts are coming soon.

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The banal marketplace rally diverged past week, with tiny caps rising powerfully and a ample fig of buying opportunities emerging from a assortment of sectors. The Nasdaq tumbled beneath its 50-day line, though the S&P 500 regained that level connected Friday.

Tesla (TSLA) and Google-parent Alphabet (GOOGL) tumbled connected earnings, portion the CEOs of Google and Meta Platforms voiced concerns that tech companies mightiness beryllium spending excessively overmuch connected artificial intelligence. That slammed Nvidia (NVDA).

So Apple, Microsoft, Meta Platforms and Amazon signals astir AI superior spending and monetization volition beryllium immense this coming week.

For investors, the champion buying opportunities and setups stay successful nontech sectors.

Nvidia banal is connected IBD Leaderboard, with Advanced Micro Devices (AMD) connected the Leaderboard watchlist. Apple banal is connected SwingTrader. Microsoft banal is connected IBD Long-Term Leaders. AppFolio banal is connected the IBD 50.

The video embedded successful this nonfiction reviews the upcoming Apple, Microsoft, Meta and Amazon net successful depth, portion besides previewing AMD stock, Arm Holdings (ARM), Arista Networks (ANET), Vertex Pharmaceuticals (VRTX), Sprouts Farmers Market (SFM) and Wingstop (WING).

Fed Meeting

The Federal Reserve gathering is connected July 30-31, with markets expecting policymakers to permission rates steady. But the Fed connection astatine 2 p.m. ET, and Fed main Jerome Powell's speech astatine 2:30 p.m. ET whitethorn awesome a readiness to chopped rates.

Investors have afloat priced successful astatine slightest a quarter-point complaint cut successful precocious September, and spot astatine slightest 2 and possibly 3 cuts this twelvemonth arsenic likely.

So if Powell doesn't springiness a wide greenish airy for complaint cuts connected Wednesday, fiscal markets could respond poorly.

Dow Jones Futures Today

Dow Jones futures unfastened astatine 6 p.m. ET connected Sunday, on with S&P 500 futures and Nasdaq 100 futures.

Remember that overnight enactment successful Dow futures and elsewhere doesn't needfully construe into existent trading successful the adjacent regular stock market session.

Join IBD experts arsenic they analyse starring stocks and the marketplace connected IBD Live

Stock Market Rally

The banal marketplace rally diverged past week, though determination was a wide bounce connected Friday.

The Dow Jones Industrial Average roseate 0.6% successful past week's stock marketplace trading, rebounding from a descent to the 21-day enactment with Friday's 1.5% jump. The S&P 500 scale retreated 0.8%, but regained its 50-day moving mean connected Friday.

The Nasdaq composite fell 2.1% for the week, beneath its 50-day enactment adjacent with Friday's rebound.

The small-cap Russell 2000 leapt 3.5%, adjacent caller multiyear highs.

The Invesco S&P 500 Equal Weight ETF (RSP) climbed 0.8%, conscionable beneath grounds highs.

The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) skidded 1.65%, to beneath its 50-day enactment arsenic tech weakness extends beyond megacaps.

The upcoming net from Apple, Microsoft and different Big Techs this week — on with the Fed complaint outlook — volition spell a agelong mode to determining whether the Nasdaq tin find its footing oregon if it volition autumn into a full-fledged correction.

While megacaps and AI plays mostly struggled, determination were a fig of breakouts oregon stocks reclaiming bargain points oregon flashing aboriginal entries, including successful housing/construction, industrial/aerospace, financial, vigor arsenic good arsenic immoderate medicals and adjacent immoderate software.

The 10-year Treasury output fell 4 ground points to 4.2%. The two-year output slumped 12 ground points to 4.39%, with the output curve continuing to crook little inverted.

U.S. crude lipid futures fell 1.89% to $77.16 a tube past week, down 7.2% implicit 3 weeks.

ETFs

Among maturation ETFs, the Innovator IBD 50 ETF (FFTY) slipped 1.3% past week. The iShares Expanded Tech-Software Sector ETF (IGV) mislaid a fraction, with Microsoft banal a large holding. The VanEck Vectors Semiconductor ETF (SMH) gave up 3.2%, with Nvidia banal a ascendant subordinate and AMD besides a cardinal holding.

SPDR S&P Metals & Mining ETF (XME) roseate 1% past week. The Global X U.S. Infrastructure Development ETF (PAVE) bounced 2.4%. U.S. Global Jets ETF (JETS) edged up 0.1%. SPDR S&P Homebuilders ETF (XHB) jumped 4.3%. The Energy Select SPDR ETF (XLE) dipped 0.2% and the Health Care Select Sector SPDR Fund (XLV) climbed 1.4%. The Industrial Select Sector SPDR Fund (XLI) roseate 1.2%.

The Financial Select SPDR ETF (XLF) precocious 1.3% and the SPDR S&P Regional Banking ETF (KRE) jumped 5.75%.

Reflecting more-speculative communicative stocks, ARK Innovation ETF (ARKK) fell 1.8% past week and ARK Genomics ETF (ARKG) soared 7.4%.

Tesla banal is the No. 1 holding crossed Ark Invest's ETFs. TSLA banal tumbled 8.1% past week connected an net miss and nary affirmative surprises connected moonshots from Elon Musk connected the call.

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Big Tech AI Signals

Apple, Microsoft, Meta and Amazon each had a pugnacious week, with lone Apple banal supra its 50-day line. They aren't breached yet, but request immoderate repair work.

For now, investors volition look for signs that tech companies are monetizing generative AI, including Apple hints connected accumulation orders for the upcoming AI-enabled iPhone 16 and Microsoft's Copilot efforts. Microsoft Azure and Amazon Web Services maturation besides are important.

Apple Intelligence volition travel successful October successful iOS 18.1, Bloomberg reported Sunday, aboriginal than the expected September launch. However, developers volition summation entree arsenic soon arsenic this week to Apple's caller AI features.

Crucially, are these tech titans consenting to support spending heavily?

Meta CEO Mark Zuckerberg and Alphabet CEO Sundar Pichai past week conceded that tech firms whitethorn beryllium investing excessively overmuch successful artificial intelligence. However, some said that AI underinvestment is simply a bigger hazard than spending excessively much.

Tech firms consciousness unit to walk heavy adjacent if lone to support their existent marketplace presumption and revenue. On that point, Microsoft-backed OpenAI connected Thursday launched a new AI-powered hunt engine, SearchGPT, taking connected Google.

Apple banal is beneath its 21-day enactment but supra its 50-day. Microsoft, Meta and Amazon banal slumped beneath their 50-day lines past week.

Strong AI capex could revive Nvidia stock, on with results and guidance from AMD and Arm Holdings. Nvidia banal gave up 4.1% for the week, coming disconnected Thursday's lows but beneath the 50-day line.

Arista Networks, successful summation to its ain results Tuesday night, volition cardinal disconnected superior spending plans from large customers Microsoft and Meta. ANET banal besides knifed beneath its 50-day past week, though it recovered enactment adjacent a anterior bargain point.

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What To Do Now

The Federal Reserve and megacap techs volition predominate headlines this coming week, and with bully reason, but with immoderate exceptions investors should beryllium focusing connected non-tech areas. Many industrials and operation firms volition beryllium reporting this week, on with immoderate much aerospace names.

Investors person had opportunities to displacement implicit from tech into the caller starring sectors successful the past fewer weeks. At the precise least, tech vulnerability should beryllium reduced importantly by this point.

Evaluate your portfolio and enactment connected your watchlists. A wide marketplace revival could spur a caller question of buying opportunities, but this week's headlines could besides trigger a bigger slide.

Read The Big Picture every time to enactment successful sync with the marketplace absorption and starring stocks and sectors.

Please travel Ed Carson connected Threads astatine @edcarson1971 and X/Twitter astatine @IBD_ECarson for banal marketplace updates and more.

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