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Tesla up after Morgan Stanley adds stock to 'top pick'

list

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Abbott slides after verdict on premature-infant-formula

trial

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Futures up: Dow 0.39%, S&P 500 0.46%, Nasdaq 0.74%

(Updated at 8:25 a.m. ET/1225 GMT)

By Ankika Biswas and Johann M Cherian

July 29 (Reuters) -

Wall Street's main indexes were poised for a strong opening

on Monday, as investors geared up for a Federal Reserve

interest-rate decision, along with Big Tech earnings and crucial

labor numbers after the recent equity sell-off.

Nvidia ( NVDA ), Alphabet, Amazon.com and

Meta Platforms ( META ) were up between 0.4% and 1.2% in

premarket trading after the recent rout in megacap tech shares

saw the main stock indexes spiral downward last week.

At 8:25 a.m. ET, Dow e-minis were up 158 points, or

0.39%, S&P 500 e-minis were up 25.5 points, or 0.46%,

and Nasdaq 100 e-minis were up 141.5 points, or 0.74%.

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 watch for a justification for the inflated

valuations of these high-momentum stocks, as well as signs that

the AI-led equity rally has room to grow.

After Wall Street's record-breaking run since the start of

2024, 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.

"This is the correct time (for a rotation) because the Fed

is more likely to cut rates, so this time it can be a little

more long lasting," said Art Hogan, chief market strategist at B

Riley Wealth.

Futures tracking the Russell 2000 index rose 0.7%

after the small-cap index marked its third-straight week

of gains on Friday, inching closer to 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 by September, in its policy decision

on Wednesday. Any hawkish commentary from central bank officials

would likely put equities under renewed selling pressure.

"(Fed Chair) Powell will want to give the market a bit of a

hint that their expectations are probably not out of bounds,

that September could be the first rate cut," Hogan said.

Bets of a 25-basis-point cut by September stood at 90%,

sharply up from nearly 60% last month, according to CME's

FedWatch Tool.

A slew of employment reports this week including the Job

Openings and Labor Turnover Survey, ADP Employment and Non-farm

Payrolls and weekly jobless claims, will be scrutinized for

concrete clues on a somewhat easing labor market.

Tesla climbed 1.8% after Morgan Stanley added

the EV maker's stock to its U.S. autos list as a "top pick".

Crypto stocks such as Coinbase Global ( COIN ), Riot

Platforms ( RIOT ) and Marathon Digital ( MARA ) gained around

4% each after bitcoin prices jumped to a seven-week high.

Abbott Laboratories ( ABT ) lost 5.1% after a jury ordered

it to pay $495 million in damages following a trial that found

the healthcare company's formula for premature infants caused a

girl to develop a dangerous bowel disease.