In the wake of several mega-cap tech earnings reports and the Federal Reserve's rate policy decision, U.S. stock futures declined across the board on Sunday night. Futures tied to the Dow Jones Industrial Average slipped 88 points, or 0.2%, while S&P 500 and Nasdaq 100 futures were down 0.2% and 0.3%, respectively.

Last week, the three major averages experienced gains following positive economic data. Fourth-quarter economic growth surpassed expectations, and core inflation on a yearly basis was lower than economists had predicted, indicating a possible slowdown in price increases. However, the market's advance was more subdued compared to the previous week's rally due to disappointing earnings from companies such as Intel and Tesla.

This week is set to be the busiest period of the earnings season, with 19% of the S&P 500 reporting their earnings. Investors eagerly anticipate the results from mega-cap tech giants including Microsoft, Apple, Meta, Amazon, and Alphabet – companies that have been leading this year's stock market rally. Additionally, investors will keep a close eye on the earnings reports from Dow components such as Boeing and Merck.

Furthermore, the Federal Open Market Committee is scheduled to commence its two-day policy meeting on Tuesday. It is widely expected that the central bank will maintain steady interest rates. Traders in the fed funds futures market have assigned an almost 97% probability that the Fed will not cut rates during the upcoming meeting, according to the CME Group.

Sonu Varghese, global macro strategist at Carson Group, expressed confidence in the current economic conditions, stating, "The Fed doesn't really have to worry about a hot economy stoking inflation anymore, because we literally see the opposite. The economy is running above trend and inflation is coming down." These factors have led to an overweight allocation in equities within portfolios.

Varghese also mentioned that while the Fed may potentially reduce rates later in the year, resulting in some capital appreciation, it may not be as substantial as the market is anticipating.

As the market awaits the outcome of the earnings reports and the Fed's policy decision, U.S. stock futures have faced a downward trend. Traders and investors will closely monitor the developments, particularly the financial results from tech giants and the Fed's monetary stance, for further insights into the market's direction.