Dow Jones Futures: Has the AI ​​Boom Lost Its Momentum? We’re About to Find Out; Fed Rate Turning Point Looms

Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures. apple (Apple company), Microsoft (Microsoft), Meta platforms (Meta) And Amazon.com (Amazon) is heading for a bumper week of earnings. The Federal Reserve is expected to signal this week that interest rate cuts are coming soon.

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These 7 Great Stocks Are Earning Gains As Tech Sells Off

Stocks were mixed last week, with small-cap stocks rising strongly and a number of buying opportunities emerging across a range of sectors. The Nasdaq fell below its 50-day level, although the S&P 500 regained that level on Friday.

Tesla (Tesla) and Google-parent the alphabet (Google) fell on earnings, while the CEOs of Google and Meta Platforms expressed concerns that tech companies may be spending too much on artificial intelligence. This has led to Nvidia (NVDA program).

So the signals from Apple, Microsoft, Meta Platforms, and Amazon about AI capital spending and profitability will be huge in the coming week.

For investors, the best buying opportunities and setups remain in non-tech sectors.

Nvidia stock is on the rise IBD Leaderboardwith Advanced Micro Devices (AMD) in the Leaderboard Watchlist. Apple stock is on SwingTrader. Microsoft stock is on IBD’s Long-Term Leaders list. AppFolio stock is on Inflammatory bowel disease 50.

The video included in this article details upcoming earnings for Apple, Microsoft, Meta, and Amazon, while also reviewing AMD stock, Arm Holding (arm), Arista Networks (network), Vertex Pharmaceuticals (In RTX), Farmers Market for Sprouts (SFM) And wing stop (wing).

Fed meeting

The Federal Reserve is scheduled to meet on July 30-31, and markets expect policymakers to leave interest rates on hold. But the Fed statement at 2 p.m. ET and Fed Chairman Jerome Powell’s speech at 2:30 p.m. ET could signal a readiness to cut rates.

Investors have fully priced in at least a quarter-point rate cut in late September, and see at least two and possibly three rate cuts likely this year.

So if Powell doesn’t give a clear green light to cut rates on Wednesday, financial markets could react badly.

Dow Jones Futures Today

Dow Jones futures open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.

Remember that overnight moves in Dow Jones futures and elsewhere do not necessarily translate into actual trades in the next regular stock market session.

Join IBD experts as they analyze leading stocks and the market on IBD Live.

Stock market rise

Stock markets have been falling over the past week, despite a broad-based rebound on Friday.

The Dow Jones Industrial Average rose 0.6% in trading last week, recovering from a slide to its 21-day line with a 1.5% gain on Friday. The S&P 500 fell 0.8%, but regained its 50-day moving average on Friday.

The Nasdaq Composite Index fell 2.1% for the week, below its 50-day moving average even with Friday’s recovery.

The Russell 2000 index of small-cap stocks jumped 3.5%, approaching multi-year highs.

Invesco S&P 500 Equal Weight ETF (Failed) rose 0.8%, just below its record high.

First Trust Nasdaq 100 Equal Weighted ETF (QQIW) fell 1.65%, falling below its 50-day line as tech weakness extended beyond large-cap companies.

Earnings from Apple, Microsoft and other big tech companies this week — along with Fed interest rate expectations — will help determine whether the Nasdaq can find its footing or fall into a full-blown correction.

While large-cap stocks and AI companies have generally struggled, there have been a number of breakouts or stocks that have reclaimed buy points or recorded early entries, including in housing/construction, industrials/space, financials, energy, as well as some medical and even some software.

The yield on the 10-year Treasury note fell 4 basis points to 4.2%. The yield on the 2-year Treasury note fell 12 basis points to 4.39%, as the yield curve continued to invert less.

U.S. crude oil futures fell 1.89% to $77.16 a barrel last week, down 7.2% over three weeks.

Exchange Traded Funds

Among the growth ETFs is the Innovator IBD 50 ETF (Boy) fell 1.3% last week. iShares Expanded Tech-Software Sector ETF (IGV) lost a small portion, with Microsoft shares among the major stocks. The VanEck Vectors Semiconductor ETF (Trait) fell 3.2%, with Nvidia shares a dominant player and AMD also a major holding.

SPDR S&P Metals & Mining ETF (XME) rose 1% last week. Global X US Infrastructure Development ETF (cradle) rose 2.4%. US Global Jets ETF (jet aircraft) rose 0.1%. The SPDR S&P Homebuilders ETF (XHP) jumped 4.3%. The Energy Select SPDR ETF (XLE) decreased by 0.2% and the Select Healthcare SPDR Fund (XLV) rose 1.4%. The Select Industrials SPDR Fund (Forty-one) rose by 1.2%.

SPDR Financial Select Fund (XLF) advanced 1.3% and the SPDR S&P Regional Banking ETF (Curry) jumped 5.75%.

The most speculative story stocks, the ARK Innovation ETF (Ark) fell 1.8% last week and the ARK Genomics ETF (I will ride) increased by 7.4%.

Tesla stock is the No. 1 investment among Ark Invest’s ETFs. Tesla stock fell 8.1% last week as the company failed to deliver earnings and there were no positive surprises from Elon Musk’s big announcements on the call.

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AI Signals for Big Tech Companies

Apple, Microsoft, Meta, and Amazon have all had a tough week, with Apple’s stock only breaking above its 50-day line. It’s not broken yet, but it needs some repair work.

For now, investors will be looking for signs that tech companies are investing in AI, including Apple’s hints about production orders for the upcoming AI-powered iPhone 16 and Microsoft’s efforts with Copilot. The growth of Microsoft Azure and Amazon Web Services is also important.

The big question is, are these tech giants willing to continue spending heavily?

Last week, Meta CEO Mark Zuckerberg and Alphabet CEO Sundar Pichai acknowledged that tech companies may be investing too much in AI. However, both said that underinvestment in AI poses a greater risk than overspending.

Tech companies are feeling the pressure to spend big, if only to maintain their current market position and revenue. On Thursday, Microsoft-backed OpenAI launched a new AI search engine, SearchGPT, in competition with Google.

Apple stock fell below its 21-day line but above its 50-day line. Microsoft, Meta and Amazon stocks fell below their 50-day lines last week.

Strong capital investment in artificial intelligence could revive Nvidia stock, along with results and guidance from AMD and Arm Holdings. Nvidia shares fell 4.1% for the week, retreating from Thursday’s lows but below their 50-day line.

In addition to its own results, which it announced late Tuesday, Arista Networks will focus on capital spending plans from its major customers Microsoft and Meta. Arista Networks shares also fell below the 50-day moving average last week, though they found support near a previous buy point.

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What are you doing now

The Fed and tech giants will dominate the headlines this week, and for good reason, but with a few exceptions, investors should focus on non-tech sectors. Several industrial and construction companies will report this week, along with some other names in aviation and aerospace.

Investors have had opportunities to shift from technology to new leading sectors in the past few weeks. At the very least, exposure to technology should be significantly reduced by this point.

Evaluate your portfolio and work on your watchlists. A broad market rebound could spark a fresh wave of buying opportunities, but this week’s headlines could also lead to a bigger slide.

Read The Big Picture every day to stay informed on market trends, leading stocks and sectors.

Please follow Ed Carson on Threads at @Edcarson1971 And X/Twitter on @IBD_ECarson For stock market updates and more.

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