Investing.com -- Corporate earnings will be in the spotlight Tuesday, especially from tech giants Tesla and Alphabet, while Wiz has reportedly turned down a deal with Google. Vice President Kamala Harris looks set for a run at the presidency.
1. Harris has backing for Democratic nomination - AP survey
Vice President Kamala Harris appears to be in prime position to receive the Democratic Party’s nomination to run against Republican candidate Donald Trump in November’s presidential election.
An AP survey indicated that Harris has the backing of at least 2,214 delegates, giving her more than enough support to win the nomination.
Harris was endorsed by President Joe Biden after he said he will not seek reelection on Sunday. But she still needs to be officially nominated as the party’s candidate, with either a vote during the Democratic National Convention in August or if the party decides to hold a virtual roll call before the meeting.
Harris has her work cut out for her, if she is nominated, given a HarrisX/Forbes poll showed Trump widening his lead in the 2024 presidential race after his official nomination during the Republican National Convention last week.
A survey held between July 19-21 showed Trump led Biden and Harris by six percentage points - 54% to 47%, increasing his lead by two points since a July 13-15 poll.
It remains unclear just how the dropping out of President Joe Biden and the endorsement of Vice President Kamala Harris will affect the outlook for the election, as the poll took place before these events.
2. Futures lower, with tech earnings due
U.S. stock futures drifted lower Tuesday, ahead of the release of key earnings reports, including from some major tech companies.
By 04:20 ET (08:20 GMT), the Dow futures contract was 40 points, or 0.1%, lower, S&P 500 futures dropped 12 points, or 0.2%, and Nasdaq 100 futures fell by 85 points, or 0.4%.
The main indices recorded a winning day on Monday, with the Dow Jones Industrial Average advancing 0.3%, while the S&P 500 rose 1.1% and the tech-heavy Nasdaq Composite outperformed, gaining 1.6%.
Corporate earnings will be the focus of attention Tuesday [see below], with results from Tesla (NASDAQ:TSLA) and Alphabet (NASDAQ:GOOGL) the highlight, after the close.
Despite Monday’s gains, the S&P 500’s technology sector has still dropped nearly 4% in under a week as growing expectations of interest rate cuts and a second Donald Trump presidency draw money away from this year’s winners and into sectors that have languished in 2024.
The economic data slate includes existing home sales for June, as well as the July Richmond manufacturing index.
3. Tesla, Alphabet lead earnings schedule
The quarterly corporate earnings season hits top gear Tuesday, with results from the likes of General Motors (NYSE:GM), Coca-Cola (NYSE:KO), Comcast (NASDAQ:CMCSA), United Parcel Service (NYSE:UPS) and Spotify (NYSE:SPOT) due before the bell.
However, most attention will be on the numbers from Tesla and Alphabet after the close, the first of the "Magnificent Seven" stocks to report.
Tesla's second-quarter margin is likely to hit a more than five-year low, on the back of discounts to clear inventory, price cuts and incentives such as cheaper financing options offered to boost EV sales, while sales dropped as customers grew tired of its old model lineup.
Investors will also want to hear more on Tesla's pivot to self-driving technology and how that could once again set the company apart from other automakers.
Alphabet is expected to report a fourth straight quarter of double-digit revenue growth on an uptick in the advertising market.
The Google parent is coming off an impressive first quarter during which it announced it initiated its first dividend and authorised stock repurchases of $70 billion.
4. Wiz turns down Google - memo
Cybersecurity company Wiz has walked away from a deal with Google-parent Alphabet, turning down a reported $23 billion offer, according to a Wiz memo seen by Reuters.
Wiz CEO Assaf Rappaport said the company would now focus on an initial public offering, as it had planned earlier, and aims to achieve an annual recurring revenue of $1 billion.
"Saying no to such humbling offers is tough, but with our exceptional team, I feel confident in making that choice," Rappaport said in the memo, referring to an acquisition offer.
Reuters reported earlier this month that Alphabet was in advanced talks to buy Wiz, a firm that provides cloud-based cybersecurity solutions to help companies identify and remove critical risks on cloud platforms.
Wiz's decision to call off the deal will be a setback for Google, which has been investing in its cloud infrastructure and focusing on winning clients for its cloud business.
5. Crude near mid-June lows
Crude prices stabilized Tuesday, near their weakest levels since mid-June as expectations of a supply surplus and uncertainty over demand continued to chip away at sentiment.
By 04:20 ET, the U.S. crude futures (WTI) climbed 0.2% to $78.55 a barrel, while the Brent contract rose 0.2% to $82.60 a barrel.
Concerns over sluggish demand in China, the world’s biggest oil importer, have weighed on the market, on top of expectations that the crude market will move into surplus next year.
Morgan Stanley (NYSE:MS) analysts warned in a note this week that the oil market will likely shift into a surplus by 2025, with waning seasonal demand and an expected increase in output across the globe set to drive the surplus.
The American Petroleum Institute, a trade group, is due to release its estimates for last week's oil inventories later in the session, with the official U.S. government data due on Wednesday.
U.S. oil inventories have seen consistent draws over the last few weeks as the summer driving season proceeds to drive demand in the world’s largest consumer.
Oil markets were also watching for any new developments in the Israel-Hamas conflict, after Israel signaled that ceasefire talks will resume from this week.