4:20pm: Big day tomorrow
Stocks finished mixed on Tuesday as investors looked past another weak session for technology shares, with strong earnings expectations and lower oil prices helping lift the broader market.
The Dow Jones Industrial Average led the way, climbing 537 points, or 1%, to close at 52,747. The S&P 500 added 16 points, or 0.2%, to finish at 7,429, while the Nasdaq slipped 55 points, or 0.2%, to 24,877 as chip stocks remained under pressure.
Technology continued to lag, with the S&P Technology Select Sector Index falling 1.9% on the day and extending its five-day decline to 4.6%, reflecting ongoing weakness in semiconductor names.
Investors also kept a close eye on the Federal Reserve as policymakers began their two-day policy meeting. While markets largely expect the central bank to leave interest rates unchanged when its decision is announced Wednesday, uncertainty around the Fed's next move has made this one of the most closely watched meetings in recent memory.
Attention is also turning to a busy stretch of corporate earnings. After Tuesday's closing bell, investors were awaiting results from Visa and Ford. Wednesday promises an even bigger slate, with Procter & Gamble, General Dynamics and Boston Scientific reporting before the open, followed by heavyweight technology companies Microsoft, Meta Platforms and Qualcomm after the close. Starbucks, Fortinet, Robinhood, Carvana and Chipotle are also set to report Wednesday evening.
For now, falling oil prices and optimism around earnings helped offset the drag from technology stocks, leaving the Dow and S&P 500 in positive territory even as the Nasdaq ended slightly lower.
3:45pm: Proactive news headlines
- First Phosphate Corp. (CSE:PHOS, OTCQX:FRSPF, FRA:KD0, OTC:FPHOY) has maintained an Outperform rating from Noble Capital Markets, which cited the company's strong funding position, debt-free balance sheet and strategic role in the North American lithium iron phosphate battery supply chain.
- 374Water Inc (NASDAQ:SCWO, FRA:8LL) has begun Phase 3 of its AirSCWO deployment in Minnesota as the state continues evaluating the company's technology for destroying PFAS-contaminated waste under a $600,000 pilot contract.
- Royal Road Minerals Ltd (TSX-V:RYR, OTC:RRDMF, FRA:RLU) has raised $7.31 million through a brokered share offering to fund drilling across its exploration portfolio in Colombia.
- Fox Tungsten Ltd (TSX-V:FOXT, OTC:HPYCF, FRA:1HC) said drilling at its fully funded 20,000-metre program in British Columbia has intersected visible scheelite mineralization in multiple target areas, suggesting the mineralized system is expanding.
2:40pm: Market movers
- Replimune (NASDAQ: REPL) shares plunged nearly 31% after FDA reviewers questioned the effectiveness of its lead cancer therapy RP1 ahead of an advisory committee meeting, extending the stock's five-day decline to about 47%.
- Royal Caribbean Cruises Ltd (NYSE:RCL) shares rose 4.4% after the cruise operator beat second-quarter profit estimates and raised its full-year outlook on strong demand and improved cost efficiencies.
- Hilton Worldwide Holdings (NYSE: HLT) raised its full-year profit forecast but saw shares fall 3.4% after issuing weaker-than-expected third-quarter guidance.
- PayPal Holdings (NASDAQ: PYPL) shares climbed nearly 4% after the payments company reported better-than-expected second-quarter earnings and revenue and increased its full-year non-GAAP guidance.
- 374Water Inc (NASDAQ:SCWO, FRA:8LL) has begun Phase 3 of its AirSCWO deployment in Minnesota as the state continues evaluating the company's technology for destroying PFAS-contaminated waste under a $600,000 pilot contract.
- United Parcel Service (NYSE: UPS) shares fell 6% after investors looked past better-than-expected second-quarter results and a higher full-year outlook to focus on weaker domestic expectations, lower international profitability and restructuring costs.
- GSK (LSE: GSK, NYSE: GSK) shares climbed to a three-month high after the pharmaceutical company beat second-quarter revenue and earnings expectations while increasing investment in its drug pipeline.
- Coca-Cola (NYSE: KO) shares gained nearly 7% after the beverage giant reported stronger-than-expected second-quarter earnings and raised its full-year guidance.
- Boeing Co (NYSE:BA, XETRA:BCO) reported a wider-than-expected quarterly loss despite beating revenue estimates as higher commercial aircraft deliveries helped lift its backlog to a record $715 billion.
- Navitas Semiconductor (NASDAQ: NVTS) shares fell about 10% after investors focused on the company's large GAAP net loss despite second-quarter revenue exceeding Wall Street expectations.
- Applied Digital (NASDAQ: APLD) reported fourth-quarter revenue that surged 407% year over year and posted an unexpected adjusted profit as it continues its transition to an AI infrastructure company.
1:00pm: Chip selloff continues
Chris Beauchamp, chief market analyst at IG, said another round of selling in tech stocks is keeping pressure on global markets, although the chip sector pullback remains relatively contained.
"Investors continue to dump AI and chip stocks at a prodigious rate. The euphoria of May and June is long gone, but the selloff is still mostly limited to these tech sectors," Beauchamp commented.
"Oil’s ongoing slump provides a cushion for a broad swathe of other sectors, but it is unlikely that these can remain immune for long. Rising CDS prices for tech heavyweights are a sign that this has the potential to turn into something quite nasty, and then in that eventuality few stocks will be able to remain immune.”
11:00am: Nasdaq enters correction territory
The Nasdaq 100 has officially entered correction territory, falling 10% from its record high as the semiconductor selloff punishes the tech-heavy index.
Meanwhile, investors reacted to a fresh batch of softer-than-expected US economic data. Private-sector hiring continued to lose momentum, with ADP data showing payroll growth averaged just 15,000 jobs per week through July 11, down from 35,750 in early May.
Elsewhere, consumer confidence disappointed, slipping to 90.8 in July versus expectations of 92.4, while the U.S. goods trade deficit widened to $101.5 billion in June, slightly above forecasts of a $100 billion deficit.
10am: Nasdaq chipmakers chipped away further
Wall Street's sweeping semiconductor sell-off deepened in early Tuesday trading, with many investors seeming to move into the Dow's blue-chip names.
The Dow gained 318 points, or 0.6%, while the Nasdaq Composite tumbled 1.2% and the S&P 500 slipped 0.2%.
The Nasdaq 100's biggest fallers were mostly semiconductors, with Western Digital, Lumentum, Seagate and SanDisk all plunging more than 11%.
Micron, Lam Research, Marvell, AMD, Arm and Applied Materials lost 7-10%, as concerns over AI financing and Chinese competition intensified.
On the Dow, paints maker Sherwin-Williams and drinks maker Coca-Cola were top of early leaderboard, jumping 7% and 6.2% after impressing with earnings. Amgen, Salesforce and Home Depot were also well bid.
Among the pre-market reporters, PayPal rose 4.2%, Boeing gained 3.7% and Royal Caribbean added 2.4% following their results.
UPS sank 6%, however, while Hilton dropped 3.5% as investors gave their updates a cooler reception.
7.45am: More market rotation expected on Tuesday
Wall Street is heading for another mixed session on Tuesday, with blue-chip gains offset by concerns about AI spending and Chinese competition weighing on some technology stocks.
Dow Jones futures were up 317 points, or 0.6%, but the Nasdaq has been called 1% lower, with S&P 500 futures down 0.1%.
Chip stocks are expected to remain under pressure, with Nvidia down another 1% before the bell after dropping nearly 5% at the start of the week.
Yesterday, the Dow climbed 263 points or 0.5% to 52,210, while the S&P 500 was little changed, adding just 1.2 points to close at 7,413, while the Nasdaq fell 0.2% to 24,932.
Falling oil prices have provided some relief, leading to easing pressure from the bond market. WTI crude has fallen another 1.7% to $81.19 a barrel after President Donald Trump said there was "a good chance" of reaching a deal with Tehran.
Market watchers said this was shifting the focus from geopolitics towards the AI trade, where many investors seem increasingly concerned about the financing required for AI infrastructure and how long it will take for the spending to deliver returns.
Reports that Nvidia could provide $250 billion in financing guarantees for OpenAI's planned Ohio data center have added to those concerns. Chinese progress in developing chipmaking equipment has also raised questions about the competitive position of Western semiconductor companies.
"Investors are running out of patience to see these investments pay off," said market analyst Kathleen Brooks at XTB.
This comes in one of the busiest weeks of the year, with the Federal Reserve beginning its two-day meeting today and several major technology companies due to report this week.
"Investors are becoming increasingly selective this earnings season, with strong revenue growth no longer enough to satisfy markets unless accompanied by evidence that elevated spending is translating into sustainable profitability," said Daniela Hathorn at Capital.com.
Coca-Cola, Boeing, S&P Global, UPS, Royal Caribbean, Sherwin-Williams, Hilton and PayPal report before the bell. Visa, KLA, Seagate Technology, Mondelez, Ford and NXP Semiconductors follow after the close.
The Fed will announce its latest policy decision on Wednesday.