Big Tech Earnings and Market Trends Under Scrutiny

U.S. stock index futures fell on Tuesday in anticipation of major earnings reports from Big Tech companies. The S&P 500 and the Nasdaq ended a three-day losing streak on Monday. Investors are focused on whether these earnings will indicate if U.S. stocks are overpriced or have growth potential.

U.S. stock index futures dipped on Tuesday as investors awaited crucial earnings reports from major Big Tech companies, expected later in the day, to gauge the sustainability of the market's recent highs.

After returning to megacap growth stocks on Monday, the S&P 500 and the Nasdaq broke a three-day losing streak, marking their largest single-day gains in over a month. Investors are keen to see if earnings from companies like Alphabet and Tesla, slated for release after market close, confirm an overvaluation of U.S. stocks or reveal further growth potential.

Shares of Alphabet and Tesla edged up around 0.3% each in a mixed premarket session. Nvidia, after posting its biggest single-day gain in nearly a month on Monday, dropped 0.8%. With President Joe Biden stepping back from his reelection bid and Vice President Kamala Harris emerging as the likely Democratic nominee, attention has shifted to quarterly earnings and the impact of high interest rates on corporate performance.

Before the bell, reports are due from General Motors, United Parcel Service, Coca-Cola, and Philip Morris International. Among the 74 S&P 500 firms that have released earnings this season, 81.1% have surpassed expectations, per LSEG data.

This week's key economic data, including the personal consumption expenditures (PCE) price index, will play a crucial role in shaping the monetary policy outlook amid easing inflation and labor market signs. CME's FedWatch Tool indicates a nearly 92% probability of a 25-basis point rate cut by September, up from almost 60% last month, with two cuts predicted by year-end.

As of 5:17 a.m. ET, Dow e-minis dropped 4 points (0.01%), S&P 500 e-minis fell 8.25 points (0.15%), and Nasdaq 100 e-minis declined 63 points (0.31%). NXP Semiconductors slumped 9% on weak third-quarter revenue forecasts due to waning automotive demand, with other chip stocks like ON Semiconductor, Texas Instruments, and Advanced Micro Devices also seeing declines between 1.2% and 3.6%.