This report is from today's CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Big Tech earnings
The S&P 500 and the Nasdaq Composite closed lower on Tuesday as tech weighed on the two stock indexes and investors awaited quarterly earnings from megacaps Meta, Apple and Amazon later this week. The broad market index retreated 0.5%, while the Nasdaq Composite tumbled 1.28%. The Dow Jones Industrial Average, with less exposure to tech, gained 0.5%. Nvidia pulled back 7% and Microsoft fell 0.9% during the normal session before reporting earnings after the bell. Treasury yields slipped while gold climbed ahead of this week's Fed meeting. U.S. oil prices U.S. oil prices fell amid concerns about China's economy.

Cloudy for Microsoft
Microsoft lost as much as 7% in after-hours trade as results from its cloud business disappointed the Street. Cloud revenue grew 29%, but fell short of consensus for the first time since 2022. Still, Microsoft beat estimates as quarterly revenue increased 15% from a year ago to $64.73 billion and net income rose to $22.04 billion. Microsoft told staff it will pay a one-time performance-based cash award of up to 25% of annual bonus to rank-and-file employees.

Starbucks miss
Starbucks' quarterly revenue slid 1% to $9.11 billion, missing forecasts as same-store sales declined for the second straight quarter. Net income fell to $1.05 billion from $1.14 billion a year ago, though it met analysts' expectations. The coffee chain's same-store sales dropped 2% in the U.S. and a steeper 14% in China, its second-largest market, where both customer traffic and average order value decreased amid intense local competition. Starbucks shares rose as much as 5% in extended trading.

Oil's China fears
Fears of a slowing Chinese economy drove U.S. crude oil futures to their lowest level since early June. "Chinese economic turmoil, including sluggish growth and falling crude oil imports, is still a major driving force for our market," Tamas Varga, analyst at oil broker PVM, wrote in a Tuesday note. The West Texas Intermediate September contract fell 1.42% to $74.73 per barrel, while the Brent September contract declined 1.44% to $78.63 per barrel. 

[PRO] Big rally ahead
Fundstrat head of research Tom Lee, who has made a string of largely successful calls in recent months, recommends investors "buy the fear" ahead of the Federal Reserve's interest rate policy announcement on Wednesday.

The bottom line

Starbucks' plummeting same-store sales in China are just the latest symptom of weakness in the world's second-largest economy. Procter & Gamble, which also reported quarterly results on Tuesday, said organic sales in Greater China slid 9% as market conditions remain subdued.

The challenges facing Western companies in China extend beyond sluggish consumer spending. The rapid ascent of Chinese brands like Temu and Shein poses a serious threat to retailers such as Amazon and eBay as they gain traction in the U.S. market.

Nvidia's dominance in the high-end chips used to train and deploy AI systems may be weakening, judging by Advanced Micro Device's latest results and news that Apple had trained its AI models on Google-designed chips.

AMD beat Wall Street's revenue and earnings expectations, and said sales in its data center segment, which includes AI chips, soared 115% on year to $2.8 billion during the quarter.

"We now expect data center GPU revenue to exceed $4.5 billion in 2024, up from the $4 billion we guided in April," CEO Lisa Su said on a call with analysts.

Apple said on Monday that the AI models underpinning Apple Intelligence, its AI system, were pretrained on processors designed by Google, a sign that Big Tech companies are looking for alternatives to Nvidia.

— CNBC's Annie Palmer, Amelia Lucas and Kif Leswing contributed to this report.