Megacaps lift Nasdaq, S&P 500 ahead of Big Tech earnings, Fed verdict
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Tesla up after Morgan Stanley adds stock to 'top pick' list
Crypto stocks rise as Bitcoin prices touch seven-week high
Abbott slides after trial verdict on premature-infant formula
Indexes: Dow down 0.35%, S&P 500 up 0.20%, Nasdaq up 0.67%
Updated at 9:51 a.m. ET/1351 GMT
By Ankika Biswas and Johann M Cherian
July 29 (Reuters) - The Nasdaq and the S&P 500 rose on Monday, buoyed by megacap stocks as investors awaited Big Tech results, a Federal Reserve policy decision and crucial labor numbers this week.
Nvidia NVDA.O, Alphabet GOOGL.O, Amazon.com <AMZN.O> and MetaPlatforms META.O were up between0.6%and 1.5% following therecent rout inmegacap tech shares, which saw the mainstock indexes spiral downward last week.
At 9:51 a.m. ET, the Dow Jones Industrial Average .DJI was down 140.72 points, or 0.35%, at 40,448.62, the S&P 500 .SPX was up 11.18 points, or 0.20%, at 5,470.28, and the Nasdaq Composite .IXIC was up 116.46 points, or 0.67%, at 17,474.34.
The S&P 500 Consumer Discretionary .SPLRCD index led sectoral gains with a0.9% rise, boosted by a 4.4% jump in Tesla's TSLA.O shares afterMorgan Stanley added the EV maker's stock to its U.S. autos list as a "top pick".
The three major U.S. stock indexes jumped more than 1% on Friday after hopes of an early start to monetary policy easing were boosted by an encouraging U.S. inflation report, close on the heels of recent data signaling a loosening jobs market.
However, the S&P 500 and the Nasdaq failed to recoup losses andclosed the week lower after a disappointing start to tech earnings prompted the indexes to log their steepest one-day slide since 2022 on Wednesday.
The next test for markets are earnings fromMicrosoft, Meta, Apple and Amazon.com, starting onTuesday, whichinvestors will watch to gauge ifthe AI-led equity rally has room to grow.
Technology behemoths have dominated Wall Street's record-breaking run, prompting investorsto turn their attention to laggardssuch as mid and small caps.
"This is the correct time (for a rotation) because the Fed is more likely to cut rates, so this time it can be a little more long lasting," said Art Hogan, chief market strategist at B Riley Wealth.
The Russell 2000 small-cap index .RUT was up 0.1% after a three-week winning streak, just shy of levels last seen more than two-and-a-half years ago.
Hopes are pinned on theFed signaling a rate cut inSeptember in Wednesday'spolicy decision, with odds for a 25-basis-point reduction at 89%, according to the CME's FedWatch. Any hawkish commentary could put equities under renewed selling pressure.
"(Fed Chair) Powell will want to give the market a bit of a hint that their expectations are probably not out of bounds, that September could be the first rate cut," Hogan said.
A slew ofemployment reports this week, including the Non-farm Payrolls, will be scrutinized for insight intoa somewhat easing labor market.
Crypto stocks such as Coinbase Global COIN.O, Riot Platforms RIOT.O andMarathon Digital MARA.O gained between2.4% and 3.6% after bitcoin BTC= prices jumped to a seven-week high.
Abbott Laboratories ABT.N dropped4.1% to the bottom of the S&P 500 aftera juryordered it topay $495 million in damages following a trial that found the healthcare company's formula for premature infants had caused a dangerous illness.
Advancing issues outnumbered decliners by a 1.23-to-1 ratio on the NYSE, and by a 1.09-to-1 ratio on the Nasdaq.
The S&P index recorded 15 new 52-week highs and one new low, while the Nasdaq recorded 73 new highs and 29 new lows.
Reporting by Ankika Biswas and Johann M Cherian in Bengaluru; Editing by Pooja Desai
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