After a good start to the week, Wall Street’s main indexes were expected to open lower on Tuesday as investors awaited important inflation numbers for hints on the Federal Reserve’s interest-rate path.
On Monday, the tech-heavy Nasdaq led the gains among the main Wall Street indices, helped by a surge in Tesla shares on confidence surrounding artificial intelligence in the wake of a Morgan Stanley rating upgrade.
Before the opening bell on Tuesday, Tesla slid 0.9%, while other megacap growth stocks like Amazon.com and Microsoft fell 0.6% and 0.7%, respectively.
Investors are anticipating the release of August consumer pricing data on Wednesday, the producer price reading on Thursday, and the Fed’s policy decision on September 20.
Strong economic data and a recent spike in oil prices have fanned worries about persistent inflation, clouding the forecast for the conclusion of U.S. monetary policy tightening.
Investors will also be watching the European Central Bank’s policy announcement on Thursday, where it is anticipated that it will hold rates after nine increases in a row.
According to Thomas Hayes, chairman of Great Hill Capital LLC, “people are a little bit concerned about energy prices picking up pretty aggressively in recent weeks and that creates some concerns as we look forward to November.”
It appears that the Fed will not raise interest rates in September, but the inflation numbers that we receive between now and November are crucial, and the market is at a stage where further tightening might be excessive and have a significant impact.
According to the CME FedWatch Tool, traders expect rates to stay where they are in September with a 93% probability and a pause in rates in November with a near 53% probability.
According to a poll, small businesses in the United States experienced their first monthly loss since April due to worries about staffing shortages and continuing inflation.
Investors will also be watching for any indications of a potential “soft landing” for the U.S. economy, which has been battered by the Fed’s relentless tightening of monetary policy.
The Dow e-minis, S&P 500 e-minis, and Nasdaq 100 e-minis were all down at 8:04 a.m. ET, or 0.17%, 0.3%, and 54.75 points, respectively.
Amid a lack of certainty around market access in China and escalating rivalry, Apple was the only major growth company to gain ground in premarket trade, up 0.2% ahead of the release of its new iPhone 15 series.
Oracle, a provider of cloud services, lost 10.4% after predicting current-quarter revenue would fall short of forecasts and barely meet first-quarter projections.
Acelyrin fell by 57% as the experimental lead medicine being developed by the pharmaceutical company failed to demonstrate its efficacy in easing the signs of an inflammatory skin condition.
WestRock’s stock increased 5.7% when it decided to merge with Smurfit Kappa of Europe to form the largest listed paper and packaging company in the world, with a value of around $20 billion.