S&P 500 and Nasdaq eye higher open ahead of Big Tech earnings

© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 19, 2023. REUTERS/Brendan McDermid/File Photo

By Bansari Mayur Kamdar and Johann M Cherian

(Reuters) -The S&P 500 and the Nasdaq were set for a slightly higher open on Tuesday after multiple companies forecast upbeat annual profits, while investors also awaited quarterly earnings reports from megacap technology companies.

Results from Google-owner Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) are due after the bell. Their shares rose 0.4% and 0.9%, respectively, in premarket trading.

U.S. tech giants are expected to signal an end to a nearly year-long slowdown in their cloud businesses as signs of economic resilience encourage clients to boost technology spending, while a pickup in digital ads will also aid their profits.

The tech-heavy Nasdaq Composite index has rallied 34.3% this year, helped by outsized gains in rate-sensitive megacap growth companies on optimism over artificial intelligence and hopes of an end to the U.S. Federal Reserve's tightening cycle.

With the central bank on track for another 25-basis point interest rate hike on Wednesday, policymakers face a choice over how much weight to put on recent economic data.

"Inflation is coming down and the economy is softening and there are those that believe that no further rate hikes are necessary," said Robert Pavlik, senior portfolio manager at Dakota Wealth.

At 8:32 a.m. ET, Dow e-minis were down 9 points, or 0.03%, S&P 500 e-minis were up 1.75 points, or 0.04%, and Nasdaq 100 e-minis were up 42.75 points, or 0.27%.

All three indexes kicked off the busy earnings and data-heavy week higher in the previous session, with a jump in oil major Chevron (NYSE:CVX) helping the Dow log its longest winning streak in over six years.

General Electric (NYSE:GE) climbed 3.8% after raising its annual adjusted profit forecast, betting on steady demand for aircraft engine spare parts and services from airlines looking to cash in on surging air travel.

Verizon Communications (NYSE:VZ) rose 2.4% after the company posted a surprise rise in wireless subscriber additions as more users upgraded their mobile phones and plan to access its 5G network.

Biogen (NASDAQ:BIIB) climbed 1.5% after the drugmaker announced layoffs, under a fresh cost-cutting program, while also posting strong earnings for the quarter.

U.S.-listed shares of Chinese companies such as Alibaba (NYSE:BABA) and Bilibili added 1.6% and 3.2%, respectively, as investors cheered pledges of support in the readout from a Politburo meeting in China.

3M (NYSE:MMM) Co rose 2.7% after the industrial conglomerate raised its annual adjusted profit forecast.

On tap at 10 a.m. ET is consumer confidence data that is expected to rise to 111.8 in July from 109.7 in June.