Wall Street's main indexes were on track for a slightly lower open on Tuesday as caution prevailed ahead of highly anticipated results from Nvidia and crucial economic data expected later in the week.
The benchmark S&P 500 and the Nasdaq took a pause from last week's rally on Monday as investors sold tech-related stocks and shifted their focus to the upcoming earnings report from AI chip firm Nvidia.
Nvidia's shares, which led a recent bull-market rally, were marginally lower in premarket trading ahead of the company's results on Wednesday, where it is likely to report quarterly revenue that more than doubled and even a slight miss could hurt shares.
Some investors are concerned about the chip designer's ability to meet lofty expectations and have questioned the pace of spending on artificial intelligence by Nvidia's largest customers.
"I don't think Nvidia will disappoint in this quarter. There may be some delays in the roll-out of the latest product, but they don't have a problem with demand for their products," Art Hogan, chief market strategist at B Riley Wealth, said.
Other chip stocks such as Broadcom fell 0.5%, while Advanced Micro Devices added 0.1%, after the Philadelphia SE Semiconductor index notched a decline of more than 2.5% on Monday.
At 8:35 a.m. ET, Dow e-minis were down 75 points, or 0.18%, S&P 500 e-minis were down 10 points, or 0.18%, and Nasdaq 100 e-minis were down 37.75 points, or 0.19%.
The blue-chip Dow closed at a record high for the first time in more than a month in the previous session and the benchmark S&P 500 is about 0.8% from its own milestone.
Traders are now betting on either a 25-basis point or a 50-basis point interest rate cut in September. Odds of the former stand at a higher 71.5%, while those of a 50-bps cut are at 28.5%, according to CME Group's Fed Watch tool.
U.S. consumer confidence numbers for August are due at 10 a.m. ET, but analysts say the next major catalyst will most likely be the July Personal Consumption Expenditure data due on Friday.
Meanwhile, UBS Global Wealth Management raised the odds of a U.S. recession to 25% from 20%, citing revised estimates of job growth and the recent July labor report that showed softness in the factors determining workers' income.
Paramount Global slid 4.7% after media veteran Edgar Bronfman Jr withdrew from the race for the company, clearing the way for Skydance Media to take control of Shari Redstone's media empire.
Chinese e-commerce giant JD.com's U.S.-listed shares gained 3.5% after its board approved a new $5 billion share repurchase program.
Hershey fell 1.2% after brokerage Citigroup downgraded the chocolate maker's shares to "sell" from "neutral".
Crypto-related stocks such as Coinbase lost 1.3% and Microstrategy fell 2.6%, tracking a 1.5% drop in bitcoin prices. - Reuters
