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Futures down: Dow 0.44%, S&P 500 0.66%, Nasdaq 0.91%

July 24 (Reuters) - Futures tied to the Nasdaq fell

sharply on Wednesday, as quarterly earnings from Tesla and

Alphabet underscored investor concerns around the dominance of

Big Tech stocks that have boosted Wall Street to all-time highs.

Tesla slumped 6.9% in premarket trading after

reporting its lowest profit margin in over five years and

missing second-quarter earnings expectations, as the EV maker

cut prices to revive demand and increased spending on AI

projects.

Google parent Alphabet, too, shed 2.8% after

flagging that capital expenses would remain high for the year,

despite a second-quarter results beat.

"The first view on Big Tech earnings wasn't inspiring," said

Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

"Two of the Magnificent 7 stocks failed to create euphoria

when they reported their Q2 results. The less-than-ideal set of

earnings comes at a time when investors are questioning whether

the AI rally has gotten ahead of itself."

Most of the so-called Magnificent Seven, a bunch of megacap

tech stocks, have notched double- to triple-digit percentage

gains so far in 2024, riding on optimism around AI and an early

start to Federal Reserve rate cuts.

As the elite group of stocks, barring Tesla, have steered

the benchmark S&P 500 and the tech-heavy Nasdaq to record highs

this year, market participants have turned wary around the

valuation of these companies and have flocked to other

underperforming sectors.

While investors are parsing the ongoing earnings season for

clues on the health of corporate America in the face of

decades-high interest rates, results from the tech giants will

be key to determine if the Wall Street rally has more steam

left.

Other megacaps including Apple ( AAPL ), Microsoft ( MSFT ),

Amazon.com ( AMZN ), Meta Platforms ( META ) and Nvidia ( NVDA )

were down between 0.5% and 2%.

Later in the day, investors will also parse economic data

including the S&P Global's flash PMI, while Friday's personal

consumption expenditures (PCE) price index will further set the

tone around the U.S. monetary policy path.

Traders have priced in a near-92% chance of a 25 basis

points interest rate cut by the Fed by its September meeting, as

per CME's FedWatch Tool.

At 4:57 a.m. ET, Dow e-minis were down 177 points,

or 0.44%, S&P 500 e-minis were down 36.75 points, or

0.66%, and Nasdaq 100 e-minis were down 182.25 points,

or 0.91%.

Further on the earnings front, solar inverter maker Enphase

Energy ( ENPH ) jumped 6.9% after beating estimates for

second-quarter operating profit.

While Texas Instruments ( TXN ) rose 2.5% after a

second-quarter profit beat, Visa dropped 3% after

third-quarter revenue growth fell short of expectations in a

rare miss for the world's largest payments processor.

(Reporting by Ankika Biswas in Bengaluru; Editing by Varun H K)