Dow futures gained 0.9%, as Nasdaq 100 futures slipped 0.8%.
The difference in their one-month performance expanded to about nine percentage points.
The Federal Reserve started its meeting, while consumer confidence figures are expected at 10 a.m.
U.S. equity futures diverged Tuesday as regular trading remained halted. Dow futures rose by 0.9%, but Nasdaq 100 futures fell 0.8%. S&P 500 futures fluctuated close to flat.
The 1.66-percentage-point difference indicated a rotation rather than a widespread sell-off in equities. Investors shifted toward firms generating immediate cash flow and pulled back from capital-intensive AI suppliers.
The pattern continued at Monday’s close. The Dow rose 0.51%, the Nasdaq Composite slipped 0.18%, and the Russell 2000 index, representing smaller firms, increased by 0.62%.
Initial, late futures reading as of about 8:40 a.m. EDT
Futures contract
Tuesday
Five days
One month
Dow E-mini
up 0.89%
gained 0.83%
increased 0.54%
S&P 500 E-mini
added 0.09%
fell 1.39%
dropped 1.38%
Nasdaq 100 E-mini
lost 0.77%
declined 4.72%
slid 8.50%
The spread between the Dow and the Nasdaq was 5.55 points over the past five days and 9.04 points over the past month. These lagging figures may not align with official opening levels.
The next major update will arrive from the top AI spenders. This week, Amazon.com NASDAQ:AMZN, Meta Platforms NASDAQ:META, Apple NASDAQ:AAPL, and Microsoft NASDAQ:MSFT are scheduled to report. Market participants are seeking proof that hundreds of billions of dollars allocated to infrastructure will translate into lasting cash flows.
Large technology firms have borrowed almost double the amount they did a year ago, Reuters said. This has brought a greater focus from investors on free-cash-flow conversion instead of just revenue gains. Dorian Carrell at Schroders LON:SDR described this attention as constructive: “We think that it’s healthy that the market’s questioning these things.” Reuters
The decline was led by chip sector shares. Advanced Micro Devices NASDAQ:AMD slipped approximately 4.2%, and Intel NASDAQ:INTC retreated about 5%. Corning NYSE:GLW tumbled 17% as cautious guidance weighed more than its stronger quarterly results.
Nvidia NASDAQ:NVDA declined again following a 5% drop on Monday. The Philadelphia Semiconductor Index is now down over 20% from its record high in June.
Markets felt the worldwide pressure. South Korea’s Kospi tumbled over 10%, activating a circuit breaker. Japan’s Nikkei lost roughly 4% as market participants weighed intensified competition from China.
Investor interest was spurred by results from cash-generating firms. Shares in Coca-Cola NYSE:KO climbed nearly 3.4% after the company raised its guidance for the full year. Coca-Cola is now targeting about 5% organic revenue growth along with 9% to 10% comparable earnings growth, with both figures presented on a non-GAAP basis.
Shares of United Parcel Service NYSE:UPS rose nearly 2.7% following an increase in its outlook. UPS forecasts 2026 revenue of approximately $91.2 billion and adjusted earnings per share of $7.22. Free cash flow for the first half jumped to $1.57 billion, up from $742 million.
Boeing NYSE:BA rose roughly 1%. The company reported quarterly free cash flow of $631 million, but operating profit came in below forecasts. Investors prioritized deliveries and better cash flow.
Lower energy costs also provided a boost beyond the tech sector. U.S. crude slipped 1.8% to approximately $81.15 per barrel. Brent shed 2.2% to nearly $84.02 while discussions between the U.S. and Iran went on.
The Federal Reserve began its two-day policy meeting on Tuesday. Markets priced in a 35.8% chance of a 25 basis point hike at Wednesday’s announcement. The rate decision is expected at 2 p.m. EDT.
Initial estimates put July’s consumer confidence at 92.0, up from the prior reading of 91.2. The Conference Board was scheduled to announce the data at 10 a.m. EDT.
Risks: Futures may swiftly change direction after markets open. Robust AI-driven returns could bolster the Nasdaq rally. However, an unexpected Fed rate hike or escalating conflict in the Middle East could accelerate selling pressure.
Currently, investors are distinguishing between growth powered by funding and growth fueled by debt. The nine-point monthly difference between the Dow and Nasdaq highlights how this distinction is impacting capital at the index level.
How are U.S. stock futures trending ahead of Tuesday's market open?
By 8:51 a.m. ET, E-mini Dow futures gained 511 points, or 0.98%. S&P 500 futures edged up 0.11%, while Nasdaq-100 futures slipped 0.73%. The Wall Street Journal The data signals a stronger Dow at the open and a flat start for the S&P. Technology stocks remain the main drag. Futures prices are subject to delay and may change significantly ahead of the 9:30 a.m. ET market open.
What is causing the Dow to outperform the Nasdaq by such a wide margin?
The divergence between the Dow and Nasdaq reflects a sector-driven dynamic. At 8:36 a.m. ET, Micron slipped 6.4% and Intel retreated 4.8%. Applied Materials lost 4.5%, while Nvidia dipped 0.4%. Meanwhile, Coca-Cola gained 4%, and both Walmart and Procter & Gamble were up around 2%. Boeing added 0.6% and Johnson & Johnson climbed 2%. This combination is boosting the performance of the price-weighted Dow relative to the Nasdaq.
What is the extent of the semiconductor selloff?
The Philadelphia Semiconductor Index remains over 20% below its June high, although it was still about 63% stronger for 2026 through Monday. Reuters Roundhill’s Memory ETF dropped 7.8% in Tuesday’s premarket trading. South Korea’s Kospi tumbled more than 10%, leading to a circuit breaker. Shares of SK Hynix and Samsung were both down over 12% in Seoul. This can no longer be described as isolated.
What did U.S. economic data released this morning indicate?
The U.S. goods trade deficit decreased by 4.2% in June to $101.5 billion. Reuters economists had forecast a slightly smaller $100.0 billion deficit. Imports dropped by $8.2 billion, reaching $306.2 billion, while exports slipped by $3.8 billion to $204.7 billion. Reuters Wholesale inventories increased 0.3%, and retail inventories were flat. July consumer confidence figures are due at 10 a.m. ET, with expectations at 92.0 compared with the prior reading of 91.2.
Is there a possibility the Federal Reserve will deliver an unexpected move on Wednesday?
The Federal Reserve announces its decision Wednesday at 2 p.m. ET, with Chair Kevin Warsh scheduled to speak thirty minutes afterward. MarketWatch At 8:36 a.m. ET, LSEG pricing gave odds of around 37% for a quarter-point hike. The majority of top brokerages are still forecasting no move this week. However, traders continue to anticipate at least a 25 basis point increase by year-end. Any unexpected hike would likely impact growth stocks that are highly valued and reliant on debt the most.
Do declining oil prices and Treasury yields support equities?
Oil prices falling are providing some support, though technology futures remain under pressure. Reuters reported a 1.8% drop in oil at 8:36 a.m. ET. Reuters West Texas crude last traded around $81.50 in early trading. The yield on the ten-year Treasury was near 4.63%, a touch lower from the previous session. Softer oil prices can ease inflation concerns, though yields at about 4.6% still put pressure on growth valuations.
Which upcoming earnings reports might influence futures this week?
Visa and Seagate are set to release earnings after Tuesday’s closing bell. Investopedia Microsoft and Meta will announce their results following Wednesday’s market close. Microsoft Amazon and Apple release earnings after Thursday’s market close. Amazon Investors are watching capital expenditures, free cash flow, and the performance of cloud businesses. Alphabet and Tesla’s recent negative cash-flow reports unsettled markets last week. These four upcoming reports may determine whether the chip sector selloff deepens.
Is the downturn in the market widespread, or is it focused primarily on technology stocks?
The S&P 500 edged up 0.02% on Monday, as the Nasdaq slipped 0.18%. The Dow posted a 0.51% increase, and the Russell 2000 rose about 0.6%. Out of eleven S&P sectors, seven ended the day higher. S&P advance/decline figures stood at roughly 1.9 to one in favor of advancers. Reuters On the year, the Russell climbed 18.8%, compared to an 8.3% gain for the S&P, pointing toward rotation rather than wholesale selling.
Which data releases might impact stocks following Wednesday's Fed decision?
Thursday's agenda includes second-quarter GDP, jobless claims, income, spending, and June PCE releases. GDP projections vary, with the Dow Jones median at 1.8% and a Reuters figure at 2.1%. MarketWatch Core PCE is anticipated to increase 0.2% on the month and 3.3% year-on-year. Forecasts put initial jobless claims at 200,000, up from 187,000. Friday's employment cost index is seen easing to 0.8% from 0.9%. Inflation surprises or stronger data could renew rate hike expectations.
Marcin Frąckiewicz is the founder and CEO of TS2 Space, a satellite communications company working with customers worldwide. His experience spans satellite communications, telecommunications and technology ventures. He graduated from the Warsaw School of Economics (SGH) and writes about space technology, artificial intelligence, stocks and the technology companies and industries he follows. Follow Marcin Frąckiewicz on Google News, Facebook or LinkedIn.
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