07:00 AM EDT, 07/22/2024 (MT Newswires) -- US equity investors will monitor the performance of smaller companies this week following their recent strong run while keeping an eye on mega-cap technology names as quarterly earnings flow in alongside the Federal Reserve's preferred inflation data.

* The Russell 2000 Index rose around 8% since the beginning of July amid an increasing probability of an interest rate cut in September. According to the CME Group's FedWatch Tool early Monday, the likelihood of a 25 basis point reduction in the fed funds rate is almost 96% compared with 60% a month ago. Last week, technology was the worst-performing sector and was also the laggard for the month. Chart-topping sectors were financials and real estate. Investors will be keen to know if the rotation away from technology has legs, especially as the Q2 earnings season proceeds.

* Key technology earnings due this week include Alphabet (GOOG, GOOGL), SAP (SAP), NXP Semiconductors ( NXPI ) , and Texas Instruments ( TXN ) . Outside of the sector, the heavyweights reporting include Tesla (TSLA), Visa (V), Coca-Cola Company ( KO ) , and Colgate-Palmolive Company ( CL ) .

* With over 14% of S&P 500 companies reported, Q2 earnings have increased almost 14% year-over-year, ahead of the FactSet consensus estimate as of June 30 for an 8.8% increase. FactSet's Q2 blended earnings estimate, which combines reported results with the remaining consensus estimates, currently implies a 9.7% jump, indicating that results are expected to trend lower but remain above quarter-end estimates.

* The Fed's preferred core PCE measure will get a double-barrelled update this week, with the Q2 estimate and possible earlier revisions arriving on Thursday and then the June estimate on Friday. The Q2 GDP advance estimate is also due this week.

* Investors will also be looking to assess the impact of President Joe Biden pulling out of the 2024 US presidential elections.