Wall St set for higher open ahead of Fed verdict, Big Tech results
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Tesla up after Morgan Stanley adds stock to 'top pick' list
Abbott slides after verdict on premature-infant-formula trial
Futures up: Dow 0.39%, S&P 500 0.46%, Nasdaq 0.74%
Updated at 8:25 a.m. ET/1225 GMT
By Ankika Biswas and Johann M Cherian
July 29 (Reuters) - Wall Street's main indexes were poised for a strong opening onMonday, as investors geared up for aFederal Reserve interest-rate decision, along with Big Techearnings and crucial labor numbers after the recent equity sell-off.
Nvidia NVDA.O, Alphabet GOOGL.O, Amazon.com <AMZN.O> and MetaPlatforms META.O were up between 0.4% and 1.2% in premarket trading after therecent rout inmegacap tech shares saw the mainstock indexes spiral downward last week.
At 8:25 a.m. ET, Dow e-minis 1YMcv1 were up 158 points, or 0.39%, S&P 500 e-minis EScv1 were up 25.5 points, or 0.46%, and Nasdaq 100 e-minis NQcv1 were up 141.5 points, or 0.74%.
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 round of earnings from Wall Street's tech giants including Microsoft, Meta, Apple and Amazon.com starts on Tuesday.
Investors will watch for a justification for the inflated valuationsof these high-momentum stocks, as well as signs that the AI-led equity rally has room to grow.
After Wall Street's record-breaking run since the start of 2024, concerns about the dominance of technology behemothshave prompted investors to pull out of these top-tier stocks and pour into lagging sections such 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.
Futures tracking the Russell 2000 index RTYcv1 rose0.7% after the small-cap index .RUT marked its third-straight week of gains on Friday, inching closer to levels last seen more than two-and-a-half years ago.
Investors now have theirhopes pinnedon the Fed signaling a rate cut, in all likelihood bySeptember, in itspolicy decision on Wednesday. Any hawkish commentary from central bank officials would likely 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.
Bets of a 25-basis-point cut by September stood at 90%, sharply upfrom nearly 60% last month, according to CME's FedWatch Tool.
A slew ofemployment reports this week including the Job Openings and Labor Turnover Survey, ADP Employment and Non-farm Payrolls and weekly jobless claims, will be scrutinized forconcrete clues on a somewhat easing labor market.
Tesla TSLA.O climbed1.8% after Morgan Stanley added the EV maker's stock to its U.S. autos list as a "top pick".
Crypto stocks such as Coinbase Global COIN.O, Riot Platforms RIOT.O andMarathon Digital MARA.O gained around 4% each after bitcoin BTC= prices jumped to a seven-week high.
Abbott Laboratories ABT.N lost 5.1% after a juryordered it topay $495 million in damages following a trial that found the healthcare company's formula for premature infants caused a girl to develop a dangerous bowel disease.
Reporting by Ankika Biswas and Johann M Cherian in Bengaluru; Editing by Pooja Desai
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