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Traders work on the floor of the American Stock Exchange (AMEX) at the New York Stock Exchange (NYSE) in New York, US, on Thursday, July 16, 2026.
Futures tied to the Nasdaq-100 dropped in early trading Tuesday, as semiconductor names fell once again, with investors bracing for a big week of megacap earnings and a Federal Reserve rate decision.
Nasdaq-100 futures were down 0.9%. S&P 500 futures dipped 0.1%. Dow Jones Industrial Average futures rose by 123 points, or 0.2%.
The VanEck Semiconductor ETF (SMH) shed 3%, led by 5% declines in Micron and Western Digital. Seagate Technology and Astera Labs were also down on the day.
Wall Street is coming off a choppy trading session. The 30-stock Dow advanced more than 260 points while the S&P 500 eked out a slight gain. The Nasdaq Composite fell on Monday as an unwind in semiconductor stocks weighed on the tech-heavy index, which spilled over into Asian markets overnight with South Korea's Kospi temporarily halted after slumping 11%. SMH on Monday dropped 3.3%, marking its third losing session in a row.
The tension in the market reflects uncertainty ahead of a big week for stocks with earnings results from Amazon, Meta Platforms and Microsoft in the calendar. The chip trade hinges on continued spending from the hyperscalers — even as the mega-caps themselves falter. Apple also reports this week.
A Federal Reserve rate decision is due Wednesday. Investors expect that the central bank will remain on hold, but will seek greater clarity on the path forward for monetary policy. Fed funds futures were last pricing in a quarter point hike in September, according to the CME FedWatch Tool.
"Our call is for no change," Padhraic Garvey, regional head of research for the Americas at ING, said in a Tuesday morning note. "We see inflation expectations tame enough for comfort. Also, the structure of the curve does not shape up for a rate hiking cycle. Specifically, the 5yr is rich to the curve."
"It's unusual for the Fed to start a rate hiking cycle with the 5yr rich to the curve. If we're wrong and the Fed does hike (whether at this meeting or the next), the curve structure suggests that any hikes delivered will be subsequently reversed, and the funds rate ends up lower than it is today within a 12-month window."
On Tuesday, traders will monitor the release of a consumer confidence report. Quarterly results from Coca-Cola, UPS, Corning and Boeing are due before the bell.
Investors will also continue to watch oil prices and the bond market. International benchmark Brent crude futures were last below $90 a barrel, amid a pause in fighting between the U.S. and Iran. The U.S. 10-year Treasury yield had pulled back to around 4.65%.
