Tech stocks extended their recent slide Tuesday, continuing the stock market’s rotation away from its biggest winners.
Investors studied a flood of earnings reports. And they prepared for data and remarks in the coming days that could shed light on some of the biggest issues facing markets: the performance of big tech companies, the thinking of the Federal Reserve and the state of the labor market.
The tech-heavy Nasdaq Composite fell 1.3% and the S&P 500 dropped 0.5% as many of the big tech stocks lost ground. Nvidia shares slumped 7%, Microsoft shares retreated 0.9% and Amazon.com shares slipped 0.8%.
The Dow Jones Industrial Average, which includes only some of the tech stocks, rose 0.5%, or about 203 points. The Russell 2000 small-cap benchmark added 0.3%, building its lead over indexes that are heavily influenced by big tech.
So far in July, the Russell 2000 has outperformed the Nasdaq by 12.8 percentage points, while the Russell 1000 Value index has beaten its growth-stock counterpart by 9 points. Both are on pace for their largest monthly leads since February 2001, according to Dow Jones Market Data.
“The market’s kind of playing catch-up for everything that was forgotten about over the last year,” said Lamar Villere, a portfolio manager at investment firm Villere & Co.
The Russell 2000 is now up 11% in 2024, compared with gains of 14% by the S&P 500 and the Nasdaq Composite.
In the coming days, investors will study a batch of results from big tech companies for signs of whether the group can regain its momentum in the market. Meta Platforms is expected to report Wednesday, followed by Amazon.com and Apple on Thursday. Disappointing reports from Tesla and Alphabet helped prompt a selloff last week.
Money managers are also focused on the Federal Reserve’s meeting this week. The central bank is expected to keep its benchmark interest rate steady Wednesday, but observers will parse the Fed’s policy statement and Chair Jerome Powell’s news conference for clues about future rate cuts.The monthly jobs report Friday will offer the latest view into the health of the labor market, potentially influencing the Fed’s thinking about rates.
“You’ve got a stock market that is certainly waiting for some bigger news to be released over the next couple of days,” said Matthew Palazzolo, senior investment strategist at Bernstein Private Wealth Management. “We’re going to learn a lot more and be a lot more informed.”
Earnings reports drove big moves Tuesday in individual stocks.
PayPal shares jumped 8.6% after the digital-payments company beat expectations and raised its annual earnings guidance. Stanley Black & Decker shares rallied 10% after the power-tool maker lifted its earnings outlook for the year.
Merck shares tumbled 9.8%, by contrast, after the drugmaker lowered its forecast for earnings this year. Procter & Gamble shares fell 4.8% after the maker of Tide detergent and Pampers diapers reported lower-than-expected sales.
In bond markets, the yield on the benchmark 10-year U.S. Treasury note fell to 4.143%, from 4.176% on Monday.
Oil prices continued their recent slide, with Brent crude falling 1.4% to $78.63 a barrel.
Overseas, the Stoxx Europe 600 rose 0.4%, and Japan’s Nikkei 225 added 0.1%. The Shanghai Composite fell 0.4%.