by Lisa Pauline Mattackal and David French

(Reuters) – The New York Stock Exchange ended slightly lower on Tuesday, after gains in big technology stocks were wiped out in late trading as investors remained cautious ahead of quarterly earnings releases from Alphabet and Tesla.

The Dow Jones index fell 0.14%, or 57.35 points, to 40,358.09 points.

The broader S&P 500 lost 8.67 points, or 0.16%, to 5,555.74.

The Nasdaq Composite fell by 10.22 points (0.06%) to 17,997.35 points.

The results of the tech giants should serve as indicators of the sustainability of the rise in Wall Street’s main indices this year.

They could also highlight an overvaluation of stocks, while the hypothesis of turning away from large “tech” stocks in favor of currently underperforming sectors could continue to gain ground among investors.

“The scenario is that these (big tech names) are going to determine the direction of the market… So if they disappoint in any way, the markets are going to suffer,” said Phil Blancato, director of Ladenburg Thalmann Asset Management.

“They have very high valuations and we could have a problem if they don’t meet expectations,” he added. The rise in big technology stocks initially lifted Wall Street on Tuesday, before major indexes fell in the afternoon, despite the continued upward trend in companies like Apple and Amazon.

Eight of the 11 major S&P 500 sectors ended the session in the red, with energy the biggest decliner (1.6%) as U.S. crude prices fell. Among companies reporting quarterly results, United Parcel Service plunged 12.1% to a four-year low after disappointing revenue.

While General Motors beat quarterly expectations and raised its annual profit forecast, the automaker fell 6.4%. Spotify gained 12% after better-than-expected quarterly results.

While 74 of the S&P 500 companies have reported results, 81.1% of them have beaten expectations, according to LSEG data. Aside from the quarterly results, investors will be watching this week the personal consumption report, the U.S. Federal Reserve’s preferred gauge of inflation.

According to CME’s FedWatch, traders are now nearly 94% betting on a 25 basis point rate cut after the US central bank’s September meeting.

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(Written by Jean Terzian)

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