Busy earnings day, Meta reportedly prepares AI chatbot - what's moving markets

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Investing.com -- Investors are preparing to sift through a deluge of corporate results on Tuesday from big-name brands like Merck, Starbucks and Caterpillar . Meanwhile, Facebook-owner Meta Platforms is reportedly gearing up to launch a new artificial intelligence chatbot that can take on the personas of different characters. Elsewhere, a bright pulsating sign on the roof of the headquarters of Elon Musk's newly-renamed social media group X is taken down after sparking controversy with local residents.

1. Futures inch lower

U.S. stock futures edged under the flatline on Tuesday as a new month of trading begins with a stream of corporate earnings set to be released.

By 05:16 ET (09:16 GMT), the Dow futures contract slipped by 97 points or 0.27%, S&P futures lost 12 points or 0.25%, and Nasdaq 100 futures dipped by 48 points or 0.30%.

The main indices closed out July in the green, with the benchmark S&P 500 jumping by 3.1% during the month after the close of dealmaking on Monday. It was the index's fifth straight month of gains - the longest such streak since 2021. The Dow Jones Industrial Average also climbed by more than 3% in July, while the tech-heavy Nasdaq Composite added around 4.1%.

Emerging signs of cooling inflation, resilient economic activity, and expectations that the Federal Reserve may soon back away from an aggressive campaign of interest rate hikes have combined to help underpin a wide-spread rally in stocks. The second-quarter earnings season, meanwhile, has featured stronger-than-expected results from a host of major companies.

2. Busy earnings week kicks into gear

A rush of corporate returns is due out on Tuesday, accelerating the pace of a busy week that will see more than 160 S&P constituent firms report their latest quarterly earnings.

Headlining Tuesday's releases before the start of U.S. trading are pharmaceutical companies Merck (NYSE:MRK) and Pfizer (NYSE:PFE), as well as construction equipment giant - and economic bellwether - Caterpillar (NYSE:CAT). Chipmaker AMD (NASDAQ:AMD) and coffee chain Starbucks (NASDAQ:SBUX) will also unveil results after the bell.

Later in the week, tech giants Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL) are scheduled to deliver their latest earnings.

More than half of the companies in the S&P 500 index have already reported. According to FactSet data cited by CNBC, four-fifths of these businesses have posted earnings that topped Wall Street estimates.

3. Meta preparing to launch AI chatbots - FT

Meta Platforms (NASDAQ:META) is preparing to release new artificial intelligence-powered chatbots that have different personalities, according to a report in the Financial Times, as the Facebook parent attempts to boost user engagement.

Citing people familiar with the matter, the paper said Meta is working on prototypes that can carry on humanlike conversations. Some versions of the AI, known internally as "personas," can take on various characters, the FT added. Sources also told the paper that Meta is exploring one chatbot that speaks like Abraham Lincoln or another that gives travel advice in the style of a surfer.

The chatbots, which the FT said could be launched as soon as September, are being designed to create a new search function and offer recommendations.

Meta declined to comment to the FT.

The report comes as the Menlo Park, California-based tech giant has been facing fierce competition to attract users and keep them engaged with its platforms. Like other Silicon Valley players, Meta is also in a race to develop -- and ultimately profit from -- AI technology.

4. Controversial X sign dismantled

A large glowing X on the roof of the San Francisco headquarters of X - the short-text messaging company formerly known as Twitter - has been removed following a string of complaints from neighbors.

The flashing sign had been placed on top of the firm's Market Street high-rise offices last Friday. Over the weekend, 24 complaints about the X were filed with the city's building department, Reuters reported. Locals had been taking videos showing the pulsating light, criticizing it as an intrusive presence in the area.

A spokesperson from San Francisco's Department of Building Inspection told Reuters that inspectors had observed the structure being dismantled on Monday, adding that the property owners will be fined for the "unpermitted installation of the illuminated structure.”

X, meanwhile, claimed the sign was taken down voluntarily.

The controversy comes as X's owner Elon Musk is attempting to overhaul the social media group and turn it into a so-called "everything app" that includes everything from payments to ride hailing. Musk has also said he would keep X in San Francisco despite what he described as a "doom spiral" of businesses leaving the city.

5. Oil drifts lower

Oil prices slipped on Tuesday in a sign of potential profit-taking following a July rally that was supported by tightening global supplies and hopes for a rebound in demand in the second half of the year.

By 05:17 ET, U.S. crude futures traded 0.37% lower at $81.50 per barrel, while the Brent contract dropped 0.29% to $85.18 a barrel.

Analysts cited by Reuters argued that oil prices may be correcting after being overbought in recent months. Meanwhile, sentiment was dented by a private survey that suggested further weakness in the Chinese economy, the world's biggest crude importer.

However, both U.S. crude and Brent settled at their highest levels since April on Monday, boosted in part by the prospect of output cuts by Saudi Arabia and Russia this month. Riyadh is also reportedly expected to extend its reductions into September at a meeting this Friday of the Organization of Petroleum Exporting Countries and allies.

Meanwhile, investors are becoming more confident that the Federal Reserve may be able to bring down inflation without causing a wider collapse of the U.S. economy. According to analysts, such a scenario, which has been dubbed a "soft landing," could help bolster fuel demand later this year in the U.S., the world's biggest oil consumer.