Dow Jones futures, along with S&P 500 and Nasdaq futures, are set to open Sunday evening at 6 p.m. ET as investors brace for a massive wave of big tech earnings and a potential Federal Reserve rate hike, according to market data. Last week, the stock market retreated significantly as oil prices and Treasury yields soared, pushing the Nasdaq below its early June lows amid mounting scrutiny over artificial intelligence capital spending.
Stock Market Rally Retreats as Tech and AI Stocks Stumble
The broader stock market rally lost momentum last week, with the Nasdaq composite tumbling 2.1% to close just below its early June lows, which analysts view as a bearish sign according to market trackers. The S&P 500 index declined 0.6%, struggling to hold its 50-day moving average, while the Dow Jones Industrial Average edged down 0.4%, finding some support near its 50-day line on Friday. Meanwhile, the small-cap Russell 2000 sank 1.1%.
Mega-cap technology stocks bore the brunt of the selling pressure. Google-parent Alphabet (GOOGL) dropped 7.8% and Tesla stock (TSLA) dived 17.8%, both weighed down by concerns over cash-burning capital expenditures. Growth-focused exchange-traded funds also absorbed heavy losses, with the CapForce IBD 50 ETF (FFTY) falling 2.8% and the iShares Expanded Tech-Software Sector ETF (IGV) tumbling 5.2%.
Big Tech Earnings and Hyperscaler Capex Face Strict AI ROI Tests
Artificial intelligence infrastructure spending takes center stage this week as hyperscalers report quarterly results. Following Google’s capital spending hike despite negative cash flow in the second quarter, Microsoft (MSFT), Meta Platforms (META), and Amazon (AMZN) are scheduled to release their earnings reports mid-week. Investors are growing increasingly concerned that massive outlays on AI hardware are outpacing immediate monetization.
Chipmakers and hardware buildout plays find themselves in a precarious position, needing continuous heavy spending from tech titans while simultaneously facing fears that such outlays are unsustainable. Hardware stocks attempted a rebound last week but suffered sharp losses on Friday, with many pulling back from their 50-day lines, including memory giant Seagate Technology (STX). In contrast, Apple (AAPL) has largely avoided massive AI bets and is trading near the top of a buy zone ahead of its Thursday earnings report.
Energy Surges and Macroeconomic Headwinds from Oil and Fed Policy
Soaring commodity and borrowing costs added to macroeconomic pressures last week. U.S. crude oil futures shot up 9.2% to $89.31 a barrel, while Brent crude spiked 9.85% to $96.78 a barrel before retreating slightly on reports of diplomatic talks involving Pakistan and Iran. The 10-year Treasury yield climbed 14 basis points to 4.68%, reflecting persistent inflation anxieties.
Against this backdrop, the Federal Reserve is scheduled to meet on July 28–29. According to market pricing, investors see about a 38% chance of a rate hike on Wednesday, with those odds climbing above 80% for the September meeting. Amid the broader market pullback, defensive and cyclical sectors outperformed. The Energy Select SPDR ETF (XLE) rallied 3.4%, and the Health Care Select Sector SPDR Fund (XLV) gained 0.9%, lifted by gains in pharmaceutical giants like Eli Lilly (LLY), Johnson & Johnson (JNJ), and Merck (MRK).
Pro Tip: When market indexes drop below key moving averages and earnings volatility spikes, experienced investors typically tighten risk exposure, keep watchlists updated, and wait for clear technical breakouts before initiating new positions.
Frequently Asked Questions
When do Dow Jones futures open for the week?
Dow Jones futures open at 6 p.m. ET on Sunday, alongside S&P 500 futures and Nasdaq-100 futures.
Which major tech companies are reporting earnings this week?
Meta Platforms, Microsoft, Amazon, and Apple headline the upcoming earnings calendar, alongside memory giants like Seagate Technology and SK Hynix.
What factors caused the stock market to retreat last week?
The market pulled back due to surging oil prices, rising Treasury yields, and investor anxiety over high capital expenditures and cash burn related to artificial intelligence investments.
Join the Discussion
How are you positioning your portfolio ahead of this week’s major tech earnings and Federal Reserve meeting? Share your thoughts in the comments below, explore our latest market analyses, and subscribe to our newsletter for real-time updates.