Investors may get a clear idea next week whether the “Big Seven” stocks can still drive the market higher, or whether they should be wary of the trap of a top-heavy market now that some large-cap stocks have faltered. If the past week is any indication, Wall Street could be in for a choppy session. On Friday, the tech-heavy S&P 500 and Nasdaq both ended the week lower, down 0.8% and 2.1% respectively. On the other hand, the Dow Jones Industrial Average had a great week, rising 0.8%. The Russell 2000 Index performed well, rising 3.5%. The small-cap index is up more than 11% this year. .SPX 5D mountain S&P 500 The moves come amid dismal earnings from Google parent Alphabet and Tesla, prompting investors to sell off technology stocks and move toward more cyclical assets. Alphabet shares fell about 6% this week. Tesla shares fell more than 7%. However, most of the results for Seven will be announced in the coming week. Microsoft reports on Tuesday, while Facebook parent Meta Platforms releases its latest quarterly results on Wednesday. Apple and Amazon are expected to report earnings on Thursday. Nvidia will release a report at the end of August. The reports could clarify what will happen to technology-heavy stock market benchmarks at a time when investors worry that artificial intelligence trading has gotten ahead of itself. For investors, more disappointing performance from large-cap stocks could mean further losses for the broader market. “The top question from clients is: is this a correction or the start of something bigger,” Strategas Securities’ Ryan Grabinski wrote of this week’s pullback in a note Thursday. . “While my first reaction is that this is a normal correction, I’m starting to see some signs of concern. First, profit forecasts for 2Q24 have been revised downwards, with Q3 down 1.4% since July 1 , down 0.2% as the fourth quarter approaches, “However, the bigger concern is the waning of ‘artificial intelligence enthusiasm,'” Grabinski added. “The cycle of recurring capital expenditures for the largest, most liquid companies does not appear to be over yet, but investors are now questioning what (returns on investment) will be going forward.” In fact, seven of the top seven companies ended the week with losses . Momentum fading While the selloff in tech stocks has investors worried about fading momentum, other investors said large-cap names remain attractive. John Belton, a portfolio manager at the Gabelli Fund, said it’s important to look at the Big Seven on a case-by-case basis. In fact, he noted that earnings results for Tesla and Alphabet this week should be different because the former is suffering from poor fundamentals and the latter is caught in a market rotation away from the technology sector. “I do think there’s going to be a real penalty for bad fundamentals in this market environment,” Belton said. “Good fundamentals — I think that’s the bar right now for a lot of tech companies in this earnings season.” Higher. “This dynamic won’t necessarily last long, but that’s where we are right now. ” Belton said that he is currently looking for opportunities in other areas of the market such as healthcare, industry and finance. But he remains optimistic about the long-term prospects of artificial intelligence. “For many of these companies, the fundamentals are still very good,” Belton said. “I don’t think these stocks are unreasonably priced as long as the fundamentals remain strong, the earnings growth outlook remains positive, and earnings estimate revisions remain positive.” FOMC meeting, July jobs report Additionally, investors The latest Federal Reserve interest rate decision, scheduled for release on Wednesday, will also be reviewed. Wall Street expects the central bank to keep its benchmark lending rate at 5.25% to 5.50%, but investors will be looking for more clarity on the rate outlook for the rest of the year. The last time markets priced in some degree of rate cuts was in September, according to the CME FedWatch tool. Traders will also get an insight into next week’s labor market with the release of the July jobs report on Friday. Investors have been carefully watching for signs that the labor market has cooled enough to justify cutting interest rates, but not to the point where the economy appears headed for recession. Economists polled by FactSet expect the U.S. economy to have added 177,500 jobs last month, down from 206,000 the previous month. The unemployment rate is expected to hold steady at 4.1%. One week ahead calendar all times are Eastern Time. Monday, July 29, 10:30 a.m. Dallas Fed Index (July) Earnings: ON Semiconductor, McDonald’s Tuesday, July 30, 9 a.m. FHFA Home Price Index (May) 9 a.m. S&P/Case Home Price Index (May) 10 a.m. Consumer Confidence (July) 10 a.m. JOLTS Job Openings (June) Gains: Advanced Micro Devices, Live Nation Entertainment, Public Storage, Electronic Arts, Starbucks, Match Group, Microsoft , First Solar, Extra Space Storage, Caesars Entertainment, Corning, Howmet Aerospace, Procter & Gamble, Pfizer, Merck & Co., Stanley Black & Decker, PayPal Wednesday, July 31, 8:15 AM ADP Employment Survey (July) 8 AM :30 Employment Cost Index (ECI) Civilian Workers (Q2) 9:45 AM Chicago PMI (July) 10 AM Pending Home Sales Index (June) 2 PM FOMC Meeting 2 PM Fed Funds Target Earnings Cap: MGM Resorts International, Allstate, Albemarle, Lam Research, eBay, Qualcomm, Western Digital, Meta Platforms, Etsy, Norwegian Cruise Line Holdings, Hess, The Boeing Company, T-Mobile, Marriott International, GE Healthcare Technologies, Generac Holdings, Kraft Heinz, Mastercard, Ingersoll Rand Thursday, August 1, 8:30 a.m. Continuing jobless claims (07/20) 8:30 a.m. Initial jobless claims (07/27) 8:00 a.m. 30 Unit labor cost preliminary data (Q2) 8:30 AM Productivity SAAR preliminary data (Q2) 9:45 AM Markit PMI Manufacturing (July) 10 AM Construction spending (June) 10 AM ISM Manufacturing Industry (July) Gains: Apple, Clorox, Intel, Amazon.com, Booking Holdings, Motorola Solutions, Microchip Technology, Kellanova, Hershey, Moderna, Air Products and Chemicals Friday, August 2, 8:30 AM Employment Report (7 Month) 10 a.m. Durable Financial Statements (June) 10 a.m. Factory Orders (June) Profit: Exxon Mobil, Chevron