Stock Market News Today: Markets slide ahead of Fed with earnings deluge on tap (SP500)

Technology stocks on Tuesday suffered another selloff, sending the broader U.S. market largely lower. Wary investors geared up for earnings reports from more members of the “Magnificent 7” club and a Federal Reserve rate decision that is expected to pave the way for monetary policy easing in September.

The tech-heavy Nasdaq Composite (COMP:IND) had retreated 1.83% to 17,052.08 points in afternoon trade, while the benchmark S&P 500 (SP500) had fallen 0.97% to 5,410.41 points. The blue-chip Dow (DJI) was clinging onto gains of 0.17% at 40,609.21 points.

Chip names in particular dragged down the Nasdaq (COMP:IND) and the S&P (SP500), ahead of quarterly results from the world’s second-largest maker of personal computer processors, Advanced Micro Devices (AMD). Meanwhile, CrowdStrike (CRWD) was under renewed pressure after a Monday report that top U.S. carrier Delta Air Lines (DAL) had hired a law firm to pursue damages for the July 19 worldwide IT outage.

Eyes are on tech behemoth Microsoft’s (MSFT) performance after the closing bell. The Redmond, Wash.-based giant’s numbers will be closely watched, especially after Alphabet (GOOG)(GOOGL) and Tesla’s (TSLA) disappointing earnings last week that contributed to the Nasdaq Composite’s (COMP:IND) worst day since October 2022.

Of the 11 S&P sectors, six were in the red, led by an outsized drop of more than 2% in Technology. Energy topped the five gainers.

Monetary policy remains in the spotlight, with the Federal Open Market Committee kicking off its two-day meeting on Tuesday. Tomorrow, markets are widely expecting the committee to hold the federal funds rate steady, but are also anticipating policymakers to pave the way for easing in September.

“Friendly reminder that today is the beginning of the Fed’s July meeting … Unlikely to see any change in official rates, but the Fed will likely sound more dovish than it has. We shall see,” Francois Trahan, founder of the Macro Institute and Trahan Macro Research, said on X (formerly Twitter).

Economic data released on Tuesday did little to change traders’ Fed expectations. The latest Job Openings and Labor Turnover survey showed the number of job openings was unchanged at 8.2M in June, compared to an expected figure of 8M. Additionally, the Conference Board’s gauge of consumer confidence inched up in July, though indicators for the present were downgraded.

“Consumers spot changes in their local economies before the data. The Conference Board’s Labor Differential dropped to 18.1 in July, a fresh cycle low. Consumers are seeing softer labor market conditions and historically this has coincided with a rising unemployment rate,” Renaissance Macro Research said on X.

“The Fed should NOT play a game of ‘keeping their options open’ at the upcoming meeting. They either cut now (unlikely) or strongly signal cuts are on the way,” RenMac added.

Looking at the fixed-income markets, U.S. Treasury yields were lower. The longer-end 30-year (US30Y) and 10-year yields (US10Y) were both down 3 basis points each to 4.40% and 4.15%, respectively. The shorter-end, more rate-sensitive 2-year yield (US2Y) was down 4 basis points to 4.37%.

See live data on how Treasury yields are doing across the curve on the Seeking Alpha bond page.

Among earnings-related moves, Procter & Gamble (PG) slid nearly 6% after the owner of popular consumer brands such as Gillette, Tide and Ariel delivered a surprise decline in quarterly sales.

Merck (MRK) slumped after the pharmaceutical major and Dow 30 component trimmed its annual profit guidance.