Head over to our US site for more market moving news.

Chris Beauchamp, chief market analyst at online trading platform IG, said:

After propelling markets to record highs in the first half of 2024, the mega cap tech companies that have dominated Wall Street are now grappling with the aftermath of a global selloff that has wiped nearly $1tn (£755bn) off their combined market value.

The so-called “Magnificent Seven” — a term inspired by the classic Western film and popularised on Wall Street — includes tech behemoths Alphabet (GOOG), Amazon (AMZN), Apple (AAPL), Meta (META), Microsoft (MSFT), Nvidia (NVDA), and Tesla (TSLA). These companies were instrumental in driving the S&P 500's (^GSPC) gains last year, with a Morgan Stanley report highlighting that these seven companies alone accounted for half of the index's total return.

As the AI rally enters a crucial stage, investors are left to consider where to look for alternatives to diversify their portfolio or undervalued stocks that might benefit from artificial intelligence. Here are some companies to have on your radar.

Read more: Five alternatives to Mag 7 stocks if you missed out on Nvidia

From our trending tickers dispatch:

Shares in the department store chain were 7% higher in pre-market trading as its second quarter results beat estimates on the top and bottom line.

The Seattle-based company said it had net income of 72 cents per share. Earnings, adjusted for one-time gains and costs, were 96 cents per share.

The results came in well above Wall Street expectations, with the consensus being earnings of 74 cents per share.

Total revenue at the company rose 3.2% to $3.89bn in the quarter ended 3 August, from $3.77bn a year earlier.

Despite the earnings beat, Nordstrom (JWN) provided cautious full-year guidance, expecting adjusted EPS between $1.75 and $2.05 and sales ranging from a 1% decline to 1% growth.

The pound (GBPUSD=X) headed lower on Wednesday as the dollar strengthened, while investors eye a key US inflationary report which may guide the timing of future Federal Reserve rate cuts.

The pound was down 0.3% to trade at around $1.32, pulling back from recent highs. Earlier in August, sterling had been as low as $1.27 against the dollar, but had clawed its way back to a two-month high on Tuesday.

The dollar also strengthened against gold (GC=F) following recent all-time highs for the haven commodity. Gold futures were down 0.4% by late-morning in London.

READ FULL STORY HERE

From my colleagues Pedro Goncalves and Vicky McKeever:

Shares in CrowdStrike (CRWD) were just above the flatline in pre-market trading as the cybersecurity firm prepares to reveal its quarterly earnings on Wednesday, with investors eager to see how the company behind the recent global outage is performing.

The cybersecurity firm has seen its market value sharply decline after its involvement in a Microsoft-related (MSFT) IT disruption that caused widespread chaos. The incident, attributed to “a single content update for Windows hosts”, led to severe disruptions across various sectors, including airlines, emergency services and media outlets globally.

"We worry new customer additions are going to see an impact. Executives may want to get 'into the weeds' on why CrowdStrike is the right answer and why their choice is not inviting a future outage," Bernstein analysts said in a note.

The cloud-based security company is expected to post quarterly earnings of $0.98 per share in its upcoming report, which represents a year-over-year change of +32.4%, according to Zachs Research. Revenues are expected to be $958.66m, up 31% from the year-ago quarter.

Shares of the company have declined about 20% since the outage, wiping about $20bn from its market value.

Prudential (PRU.L) stock popped around 1.7% on Wednesday morning in London, after it said it is confident in meeting its financial targets for the year. This came despite it reporting a slowdown in new business in the first half.

Its new business profit for that period fell to $1.5bn. This was down 1% on the same period in 2023, when taking exchange rate movements into account.

KPMG data published this morning shows an uptick in financial fraud cases reaching the courts.

Money laundering has been the most common fraud type by value in the last six months, the data shows. Nine cases have been heard in UK Crown Courts collectively worth £128.2m so far this year.

The research, which records alleged fraud cases with a value of £100k and above heard in UK Crown Courts, shows 122 fraud cases in total were heard in the first six months of the year. This is up from 105 cases during the same period in 2023.

By contrast, fraud value was just over £305m, a 14% drop compared to the first six months of the previous year, when the total fraud value stood at £354.2m.

The UK's top financial regulator said on Wednesday it would move to look at how pure protection insurance products are sold following concerns that competition is not working well in the market. The study will be launched later in 2024/25.

Pure protection products are designed to help individuals and their families with their finances should the policyholder die or become unable to meet their financial commitments. Around £4bn was paid out in claims in 2022. The products are mainly sold through intermediaries like independent financial advisers or mortgage brokers.

“Pure protection can offer peace of mind and financial security, often when people are at their most vulnerable. Consumers should be able to buy products which meet their needs and provide fair value," said Sheldon Mills, executive director of consumers and competition at the FCA.

“We have seen indications that this may not be the case across the pure protection market and we will act if we find that the market is not working well.”

The FCA has concerns that the design of commission arrangements may not allow firms to deliver good outcomes to policyholders. The regulator is also concerned that some products may be providing poor value, for example if the total premiums paid over a lifetime far exceed the maximum conceivable payout.

The FCA will focus primarily on the sale of four specific types of products – term assurance, critical illness cover, income protection insurance and whole of life insurance including policies for over 50s that offer guaranteed acceptance.

Trade in Asian hours on Wednesday was mixed among major indices with the Nikkei (^N225) 0.2% higher and Chinese stocks mostly lower. The Hang Seng (^HSI) in Hong Kong fell 0.9% and the SSE Composite (000001.SS) moved 0.3% downwards.

Traders are looking to Nvidia earnings for a read on the future direction of tech and AI stocks.

Over in Hong Kong, the Hang Seng was dragged down by Nongfu Spring (9633.HK), which plunged as much as 13% in the session and closed 10.9% lower. The bottled water manufacturer saw its slowest half-year profit growth in four years.

US stock futures are moving cautiously this morning.

Our US team writes:

US stocks saw choppy trading action on Tuesday but the Dow was able to eke out another record close as investors tread carefully on the eve of Nvidia's (NVDA) potentially market-moving earnings report.

The Dow Jones Industrial Average (^DJI) finished the day just above the flatline to claim another back-to-back record high. The benchmark S&P 500 (^GSPC) and tech-heavy Nasdaq Composite (^IXIC) each closed up around 0.2%.

Stocks are struggling to find a footing as investors debate whether chipmaker Nvidia's high-stakes results on Wednesday can once again live up to elevated expectations. Semiconductor stocks lost ground on Tuesday alongside a 1% drop for the AI darling, a sign of how Nvidia's report could ripple through techs as it tests the AI trade that has driven gains.

At the same time, investors are counting down to a crucial update to the inflation gauge favored by the Federal Reserve. Chair Jerome Powell's clear message that an interest rate cut is imminent confirmed widespread confidence in a policy pivot in September. Friday's reading on the PCE price index could dent or cement bets on a 0.5% interest rate cut next month.

Hello from London. Lucy Harley-McKeown here, bringing you the markets and business news of the day.

Wednesday's on diary news includes:

• Bank of England capital issuance figures

• Nvidia (NVDA) second-quarter results

Let's get to it.