Stocks Struggle as Investors Await Inflation Update and Tech News

Introduction

Stocks struggled for direction Tuesday as investors looked ahead to Wednesday’s critical inflation update and took in an onslaught of headlines from the tech sector.

Tech Stock Apple Continues to Struggle

Mega-cap tech stock Apple (AAPL) continued its recent price struggles as the company unveiled its latest line of iPhones at an annual product event.

Focus on August Consumer Price Index (CPI)

The bulk of today’s attention swirled around expectations for tomorrow morning’s release of the August Consumer Price Index (CPI). Many experts believe headline CPI accelerated in August as gas prices jumped. However, the core CPI reading, which excludes volatile food and energy prices, is expected to decline on an annual basis vs July’s figure.

Fed Rate Decision and Market Expectations

“This is one of the last pieces of key economic data ahead of the Fed’s rate decision and I think it would take a shockingly hot number to push the Fed to hike next week,” says Michael Reinking, senior market strategist at the New York Stock Exchange.

Indeed, futures traders are currently pricing in a 93% chance the Federal Reserve will keep interest rates unchanged at next week’s meeting, according to CME Group.

Arm Prepares for Blockbuster IPO

Arm, the Softbank-owned chipmaker, is set to go public this Thursday. Demand for this highly anticipated IPO is so high that Arm stopped taking orders a day ahead of schedule. The IPO is expected to be priced at a range of $47 to $51 per share, resulting in $5 billion in new capital for the company and a roughly $54.5 billion valuation. However, some experts warn that the valuation is disconnected from the company’s fundamentals.

Apple Stock Slips After September Event

Apple’s stock slid 1.7% as the company unveiled new products at its annual September event. In addition to the iPhone 15 series, the tech giant debuted its latest smartwatch iterations, including the Apple Watch 9.

Oracle Plunges After Earnings Report

Oracle plunged 13.5% after the cloud software company revealed its results. While Oracle reported higher-than-expected fiscal first-quarter earnings, revenue fell short of estimates, and the company forecast lower-than-anticipated fiscal Q2 results.

Market Performance

The Dow Jones Industrial Average finished marginally lower at 34,645, while the S&P 500 and the Nasdaq Composite suffered bigger losses.

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