Dow Jones Industrial Average grapples with tech backslide

• The Dow Jones was flat on Tuesday after the tech rally sputtered, dragging chip stocks lower.
• Trump continues his campaign against Fed Chair Powell.
• Investors fumbled their bullish stance as earnings season sees a few dark spots.

The Dow Jones Industrial Average (DJIA) remains trapped in consolidation around the 44,400 region on Tuesday. Earnings week is in full swing, and a few key misses on Tuesday gave investors cause for pause, twisting a kink into the tech rally and dragging down key blue chips.

United States (US) President Donald Trump still has a lot to say about Federal Reserve (Fed) Chair Jerome Powell. The Trump administration is actively campaigning against the Fed head as Trump looks for a way to dump his own pick for head of the Fed ahead of schedule. According to Donald Trump, US interest rates should be at or near 1%, depending on which math Trump uses from one moment to the next.

Earnings season has overall been a positive with analyst expectations set low enough that over 80% of reporting companies have beat the street. However, key misses on Tuesday crimped investor sentiment, with defense manufacturer Lockheed Martin (LMT) falling to a 52-week low after missing Q2 revenue expectations. Tobacco giant Phillip Morris (PM) also fell short of earnings estimates, dipping around 8% on the day at its lowest point.

AI, airplanes and tobacco

Tech stocks took a hit on Tuesday as the incredibly overweight sector began to show signs of further strain. AI rally darling Nvidia (NVDA) took a 2% hit after a Wall Street Journal report highlighted that the $500B Starlink megaproject, jointly funded by SoftBank and OpenAI, has run into some early snags and now has to scale down expectations of what they will be able to deliver on their original timeline. Semiconductors also took a hit on Tuesday as earnings for computer hardware materials suppliers underperformed forecasts.

Google-owner Alphabet (GOOGL) and Tesla (TSLA) will be kicking off earnings for the megacap 'magnificent seven' stocks on Wednesday. A significant portion of Wall Street's earnings expectations are expected to be met by the two tech giants.

Dow Jones price forecast

Middling performance has become the name of the game for the Dow Jones. Price action is firmly pinned in a consolidation range between 44,800 and 44,000. The Dow's latest bullish push has left the major equity index stranded in no man's land without enough momentum to reclaim new record highs north of 45,000. However, downside technical levels are tricky to nail down with the DJIA outpacing its own moving averages by a significant margin.

Dow Jones daily chart