July 29 (Reuters) - Futures tracking the main U.S. stock indexes rose on Monday after a recent sell-off, as investors braced for a busy week that will bring a Federal Reserve interest-rate decision, along with Big Tech earnings and crucial labor numbers.
Nvidia (NVDA.O), Alphabet (GOOGL.O), Amazon.com <AMZN.O> and Meta Platforms (META.O), were up between 0.7% and 1.1% before the bell after the recent rout in megacap tech shares saw Wall Street's main stock indexes spiral downward last week.
Tesla (TSLA.O), was lifted 1.4% after brokerage Morgan Stanley added the electric-vehicle-maker's stock to its U.S. autos list as a "top pick".
At 07:13 a.m. ET, Dow e-minis were up 163 points, or 0.40%, S&P 500 e-minis were up 20.5 points, or 0.37%, and Nasdaq 100 e-minis were up 112.59 points, or 0.59%.
The three major U.S. stock indexes jumped more than 1% on Friday after hopes of an early start to monetary policy easing were boosted by an encouraging U.S. inflation report, close on the heels of recent data signaling a loosening jobs market.
However, the S&P 500 and the Nasdaq failed to recoup losses and closed the week lower after a disappointing start to tech earnings prompted the indexes to log their steepest one-day slide since 2022 on Wednesday.
The next round of earnings from Wall Street's tech giants including Microsoft, Meta, Apple and Amazon.com starts on Tuesday.
Investors will be on the watch for a justification for the inflated valuations of these high-momentum stocks, as well as signs that the AI-led equity rally has growth to spare.
"With results still due from some big firms this week, market volatility is likely to continue," analysts at UBS said.
After Wall Street's record-breaking run since the start of this year, concerns about the dominance of technology behemoths have prompted investors to pull out of these top-tier stocks and pour into lagging sections such as mid and small caps, which are expected to benefit from a low-interest-rate environment.
"The recent pullback (from megacaps) creates a re-entry opportunity, in our view, especially for those companies with strong earnings growth visibility," UBS analysts said.
The Russell 2000 index (.RUT), marked its third-straight week of gains on Friday and was not far from reclaiming levels last seen more than two-and-a-half years ago.
Investors now have their hopes pinned on the Fed signaling a rate cut, in all likelihood in September, in its policy decision on Wednesday. Any hawkish commentary from central bank officials would likely put equities under renewed selling pressure.
Bets of a 25-basis-point cut by September have held around 89%, although they are up sharply from nearly 60% last month, according to CME's FedWatch Tool.
A raft of employment reports through the week such as the Job Openings and Labor Turnover Survey, ADP Employment and Non-farmPayrolls and weekly jobless claims, will be scrutinized for concrete clues on a somewhat easing labor market.
Among other movers, McDonald's (MCD.N), rose 0.8% in choppy trading after it reported a surprise drop in quarterly global comparable sales.
Crypto stocks such as Coinbase Global (COIN.O), Riot Platforms (RIOT.O), and Marathon Digital (MARA.O), gained between 3.7% and 4.1% after bitcoin prices jumped to a seven-week high.
Abbott Laboratories (ABT.N), lost 6.7% after a jury ordered the healthcare company to pay $495 million in damages in a premature-infant-formula trial.
Reporting by Ankika Biswas and Johann M Cherian in Bengaluru; Editing by Pooja Desai
