5 things to know before the stock market opens on Wednesday, July 31

Here are five important things investors need to know to start their trading day:

The S&P 500 And Nasdaq Composite fell on Tuesday as the rotation out of large-cap tech stocks continued. The broader market index fell about 0.6% and the Nasdaq fell even more, down 1.2%. On the other hand, Dow Jones Industrial Average saw gains, closing up 0.3%. This comes amid a strong earnings season so far, with about 80% of the 230 S&P 500 companies that have reported results that beat expectations, according to FactSet data. Earnings growth is “expanding,” said Mona Mahajan, principal and senior investment strategist at Edward Jones. “We think the bar is very high for tech earnings,” she said. speak. “If we see any signs that AI spending is cooling, we could see stocks fall a little bit. But we’ve already gone through a significant correction.”

of Microsoft disappointing cloud results may be taking a hit on the company’s earnings parade. The company’s Intelligent Cloud segment — which includes Azure public cloud, Windows Server, Nuance, and GitHub — brought in $28.52 billion in revenue for its fiscal fourth quarter. That was below the consensus estimate of $28.68 billion, according to analysts polled by StreetAccount. Revenue from Azure and other cloud services grew 29% in the period, below the 31% growth expected by analysts polled by CNBC and StreetAccount. Shares of Microsoft fell sharply in extended trading on Tuesday following the news, even though the company also beat Wall Street’s earnings and revenue expectations in its quarterly results.

The stage is set for Federal Reserve meeting on Wednesdaycould provide clues about the trajectory of potential rate cuts in the coming months. The Fed has kept its benchmark funds rate unchanged for the past year, holding it in a range of 5.25% to 5.5%. Policymakers are expected to leave short-term interest rates unchanged again at this meeting — and set up a cut in September. “Leaving the door open for that rate cut is probably the most appropriate thing for them to do at this point,” said Glenmede’s Michael Reynolds. “But the market has been pretty excited about it, pricing in a probability close to 100%. So the Fed doesn’t have to do too much to change the narrative on that. I think if they just tweak the statement in a favorable way, it will get the job done,” the firm’s vice president of investment strategy continued.

Metadata on Tuesday agreed to settle a lawsuit, paying a record $1.4 billion to the state of Texas over five years. The lawsuit, filed by Texas Attorney General Ken Paxton in February 2022, alleges that the company collected and used the biometric data of millions of Texans without their consent. According to Paxton’s office, Facebook stored billions of biometric identifiers — the data contained in photos and videos uploaded to the site — after it introduced a new feature called “Tag Suggestions” in 2011. “Most Texans are unaware that for more than a decade, Meta has run facial recognition software on virtually every face in photos uploaded to Facebook, creating a profile of the facial appearance of the people depicted,” the attorney general’s office said.

Stellantis is once again cutting its workforce in the United States. In an email to employees on Tuesday, the automaker speak The company will offer a broad voluntary buyout to nonunion employees at the vice president level “and below in certain functions.” The company also said involuntary terminations could occur if not enough employees participate in the buyout program. Eligible employees will be notified by email in mid-August about how to access their offers, according to the email. From December 2019 through the end of 2023, Stellantis has cut about 47,500 employees, or 15.5% of its workforce, according to public filings.

— CNBC’s Pia Singh, Yun Li, Jordan Novet, Jeff Cox, Dan Mangan and Michael Wayland contributed to this report.

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