Hamza Shaban
Stock market news today: Nasdaq sinks, Nvidia drops 7% ahead of Big Tech earnings
In this article:
Just ahead of a pivotal Fed policy meeting and a clutch of Big Tech quarterly reports, US stocks fell, dragged by a drop of AI chip heavyweight Nvidia (NVDA).
The S&P 500 (^GSPC) fell by 0.5% while the tech-heavy Nasdaq Composite (^IXIC) dropped roughly 1.3%, as investors awaited key earnings from the likes of Microsoft (MSFT) and AMD (AMD). The Dow Jones Industrial Average (^DJI) rose 0.5%.
Stocks are in the midst of a potentially momentous week featuring the Fed's interest-rate decision, the July jobs report, and results from four of the "Magnificent Seven" megacaps. All will be crucial for investors wondering whether the recent stock pullback is over, as they weigh expectations for rate cuts against concerns that Big Tech names have lost their AI-driven mojo.
Semiconductor stocks lagged on Tuesday, with shares of Nvidia dropping 7% at the closing bell.
Eyes are now on Microsoft's quarterly report due after trading ends, which will set the stage for results from Apple (AAPL), Amazon (AMZN), and Meta (META) in the following days.
Wall Street is watching closely for any sign that massive AI investments are starting to pay off. That question is in focus after July's volatile ride for stocks underlined the risks of the AI trade, as investors rotated out of Big Tech and into small caps.
Coffee-shop chain Starbucks (SBUX) will report after the market close, as will chip giant AMD.
Despite the AI jitters, a notable theme has emerged this earnings season — a willingness by investors to support companies that post weak results but outline a turn in their business coming soon.
Read more: 32 charts that tell the story of markets and the economy right now
Meanwhile, the Fed began its July policy meeting on Tuesday. Policymakers are expected to bring no change in borrowing costs on Wednesday, but to lay the groundwork for a rate cut in September. After encouraging June inflation data, the market debate now centers on the timing and number of cuts this year.
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Stocks lose ground ahead of Fed policy decision and Big Tech earnings
Just ahead of a pivotal Fed policy meeting and a clutch of Big Tech quarterly reports, US stocks fell, dragged by a drop of AI chip heavyweight Nvidia (NVDA).
The S&P 500 (^GSPC) lost 0.5% while the tech-heavy Nasdaq Composite (^IXIC) dropped roughly 1.3%, as investors awaited key earnings from the likes of Microsoft (MSFT) and AMD (AMD). The Dow Jones Industrial Average (^DJI) rose 0.5%.
All eyes on the Fed
The big day is almost here, or at least the big day before the big day.
Wednesday's Fed policy meeting may be the last huddle before officials decide to lower interest rates. But like in meetings past, nuanced comments from Fed Chair Jerome Powell will likely only signal where things are headed rather than offer a direct roadmap.
The stakes are high for Fed officials, who now must consider both sides of their dual mandate.
"The Fed is playing a balancing act: perfectly time rate cuts to cultivate a soft landing without reigniting inflation pressures," said Seema Shah, chief global strategist at Principal Asset Management. "Indeed, the uncertainty around the last mile of progress for stubborn and sticky inflation undoubtedly complicates the Fed’s decision making."
Policymakers are expected to keep rates unchanged at the end of their July meeting, but Wednesday's message is likely to lay the groundwork for a rate cut in September. After encouraging June inflation data, the market debate now centers on the timing and number of cuts this year.
Meta to report earnings with ad sales, AI spending top of mind
Facebook and Instagram parent Meta (META) reports its second quarter earnings after the bell on Wednesday, and the company’s AI spending and advertising business performance are set to take center stage.
AI spending is a key measure for Wall Street as investors anxiously await a return on Big Tech’s investments in the technology, reports Yahoo Finance's Daniel Howley. During its prior quarter, Meta CFO Susan Li raised the company’s full-year total expense estimate from between $94 billion and $99 billion to between $96 billion and $99 billion.
While Meta’s advertising revenue looks set for strong performance, that doesn’t mean that every aspect of the company’s earnings report will be positive. Wall Street is still trying to determine how much longer tech companies will need to plow money into AI before they see some kind of revenue payoff.
Last week, CEO Mark Zuckerberg announced Meta’s latest open-source large language model (LLM) called Llama 3.1. What’s more, the Facebook founder said the industry should focus on open-source AI rather than closed-source models like OpenAI’s ChatGPT.
Meta to pay $1.4B settlement with Texas in facial recognition lawsuit
Meta has agreed to pay $1.4 billion to settle a lawsuit with Texas over allegations that the company violated state law by using the biometric data of its users without their consent.
Texas Attorney General Ken Paxton said the settlement is the largest secured by a single state. And it follows an agreement in 2021, when the company previously known as Facebook paid $650 million over similar allegations in Illinois.
Meta said in a statement: “We are pleased to resolve this matter, and look forward to exploring future opportunities to deepen our business investments in Texas, including potentially developing data centers.”
The lawsuit stemmed from Facebook's face recognition system, which previously had a default setting that would recognize users, but was later changed to ask people if they wanted to use the feature.
Shares of Meta fell less than 1% Tuesday amid a broader pullback among technology stocks. The company is set to report earnings on Wednesday.
Stocks trending in afternoon trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page during afternoon trading on Tuesday.
Nvidia (NVDA): The AI darling dragged down semiconductor stocks and led the losses in the tech sector as shares sank as 6% Tuesday afternoon. Investors recoiled ahead of major tech company earnings, with Microsoft and AMD on deck to report after the closing bell.
CrowdStrike (CRWD): The fallout from the cybersecurity company's outage earlier this month continues to impact the stock price. Shares of CrowdSrike fell 11% Tuesday following a report from CNBC that Delta Air Lines is pursuing potential damages from the firm as well as Microsoft stemming from the global IT outage.
PayPal (PYPL): Shares of the payments company are up almost 8% after reporting second quarter earnings that beat expectations on both revenue and profit. The company reported revenue of $7.89 billion, surpassing estimates of $7.82 billion. Adjusted earnings per share also beat projections, coming in at $1.19 compared to analyst estimates of $1.00.
JetBlue (JBLU): The airline rose more than 16% Tuesday after reporting a $25 million profit for the second quarter and as company executives unveiled a new cost-cutting strategy to rebuild the business.
Stocks sink in afternoon trading
The tech slump continued into the afternoon session Tuesday as many of the biggest players lost ground and dragged the rest of the market with them.
Ahead of Big Tech earnings this week and a pivotal Fed policy meeting that will conclude on Wednesday, two major gauges were in the red.
The S&P 500 (^GSPC) fell 0.7% while the tech-heavy Nasdaq Composite (^IXIC) dropped 1.4%. The Dow Jones Industrial Average (^DJI), with less exposure to the tech downers, rose about 0.3%.
The US national debt just surpassed another milestone: $35 trillion
Yahoo Finance's Ben Werschkul reports: The US national debt topped a psychologically important milestone of $35 trillion in recent days and has risen by $1 trillion since January — mounting by nearly $5 billion every day so far in 2025.
This latest barrier was formally pierced last Friday. That's when a daily Treasury Department tabulation, which was then compiled and released late Monday, showed a gross debt level of $35.001278 trillion.
“This is crazy,” Tesla (TSLA) CEO Elon Musk noted in a post on X in one quick response to the news.
America’s red ink has now jumped by more than 75% during the Trump and Biden administrations, and yet the issue has been relegated to the back burner during the 2024 campaign season.
Read more here.
Nasdaq losses accelerate, down 1%
Losses on the tech-heavy Nasdaq Composite (^IXIC) accelerated mid-morning as semiconductor stocks fell. Shares of AI chip heavyweight Nvidia (NVDA) fell as much as 6%.
Other semi stocks also fell ahead of chip giant AMD's (AMD) earnings, due after the market close.
The Nasdaq Composite fell more than 1% while the S&P 500 (^GSPC) dropped 0.5%.
Shares of semiconductor stocks fell on Tuesday, dragging on the Nasdaq Composite Nasdaq turns negative as Nvidia drops 4%
The Nasdaq turned negative on Tuesday morning as shares of AI chip heavyweight Nvidia (NVDA) tanked roughly 4%.
The tech-heavy Nasdaq Composite (^IXIC) fell as much as 0.5%, erasing earlier session gains. The S&P 500 (^GSPC) also slipped below the flatline.
Other semiconductor-related stocks sank on Tuesday as investors awaited chip giant AMD's (AMD) quarterly results after the close.
Job openings steady in June while quits hit lowest level since November 2020
Job openings were roughly flat in June, declining slightly from the month prior as investors had been watching for further signs of cooling in the labor market.
New data from the Bureau of Labor Statistics released Tuesday showed that 8.18 million jobs were open at the end of June, a decrease from the 8.23 million job openings in May.
May's figure was revised higher from the 8.14 million open jobs initially reported. Economists surveyed by Bloomberg had expected the report to show 8 million openings in June.
The Job Openings and Labor Turnover Survey (JOLTS) also showed 5.3 million hires were made during the month, a slight decrease from May. The hiring rate declined to 3.4%, down from 3.6% in May.
Also, in Tuesday's report, the quits rate, a sign of confidence among workers, sat at 2.1% for the second straight month. In June, there were 3.28 million quits, the lowest number of quits in a month since November 2020.
Stocks rise as Fed meeting set to kick off, investors await Microsoft earnings
Stocks rose on Tuesday morning as investors digested more earnings and Fed officials were set to commence their two-day policy meeting.
The S&P 500 (^GSPC) nudged higher 0.2% while the tech-heavy Nasdaq Composite (^IXIC) rose 0.3% after a lackluster prior session for the major gauges. The Dow Jones Industrial Average (^DJI) rose 0.2%.
Pharmaceutical giant Pfizer (PFE) raised its annual forecast, while Merck (MRK) beat second quarter earnings estimates.
Investors will watch for Microsoft (MSFT) quarterly earnings due after the market close on Tuesday. Coffee giant Starbucks (SBUX) will also post results following the close.
This is a big week for the markets as the Federal Open Market Committee holds its two-day meeting with a rate decision due on Wednesday afternoon. Investors expect Fed officials will lay the groundwork for a September cut.
Meanwhile the monthly jobs report is due on Friday prior to the market open.
