U.S. stocks closed lower Tuesday, a day that saw Apple unveil its iPhone 15 at an annual marketing event, and raise its price on iPhone Pro Max for the first time. Investors were also looking ahead to an August inflation from the consumer-price index on Wednesday.
How stocks traded
-
The Dow Jones Industrial Average
DJIA
closed down 17.73 points or less than 0.1% to 34,645.99, snapping a three-day win streak. -
The S&P 500
SPX
ended down 25.56 points or 0.6% to 4,461.90. -
The Nasdaq Composite
COMP
shed 144.28 points or 1% to 13,773.61.
What drove markets
Stocks fell Tuesday, led lower by technology stocks, after Apple Inc .
AAPL,
released its latest products, including iPhone 15, Apple Watch and AirPods at its annual marketing event. The technology giant’s shares finished down 1.7%.
Read: Apple Event: New iPhone 15, Apple Watch announced
Apple Inc. will increase the prices on its top-of-the-line iPhone for the first time since introducing the model, which is likely to push the average price paid for an iPhone higher than $1,000 for the first time. With the iPhone 15 line, the starting price for the iPhone Pro Max will increase $100, to $1,199.
“Welcome to my annual day of being seduced into buying a new iPhone that I don’t really need but desperately want,” said Jim Reid, strategist at Deutsche Bank, adding that the launch of new Apple products “actually is a potential macro mover.”
“There are certainly questions regarding the slowdown in their upgrade cycle as after the move to 5G and high pixel cameras, an increasing number of consumers are not motivated to replace their phones for incremental improvements in processing speed, battery life, even better cameras, etc,” according to Louis Navellier, chairman and founder of Navellier & Associates.
Most of the S&P 500 index’s 11 sectors closed down Tuesday, with information technology seeing the biggest decline at 1.8%, according to FactSet data. Tech has the heaviest weight in the S&P 500 index.
Looming inflation
Meanwhile, investors are looking ahead to a reading on U.S. August inflation, as measured by the consumer-price index, or CPI, on Wednesday morning before the U.S. stock market’s open.
“CPI remains the most important monthly economic metric for the simple reason that if CPI does not continue to decline, markets will have to price in a more hawkish Fed, and that would be a headwind on stocks,” said Tom Essaye, founder and president of Sevens Report Research, in a note Tuesday.
“Sensitivity to this report will be especially high tomorrow because there have been anecdotal signs that inflation may be leveling off or bouncing back,” he said.
A “good” CPI report would show core inflation, which excludes energy and food prices, rose 0.2% or less in August, according to Essaye. Economists polled by the Wall Street Journal have forecast that core CPI increased 0.2% last month and 4.3% year over year.
Core inflation had climbed 4.7% in the 12 months through July, as measured by the consumer-price index.
“A continued drop in core CPI will help to calm concerns that inflation is bouncing back, and that could trigger a solid drop in Treasury yields and a good relief rally in stocks,” said Essaye.
See: Inflation is set for a big increase, CPI to show. Here’s why.
Companies in focus
-
Oracle Corp.
ORCL,
+2.03%
dropped 13.5% on Tuesday after the cloud database company’s issued revenue outlook fell below Wall Street expectations. -
Canopy Growth Corp.
CGC,
-13.43%
shares tumbled 20.7% after a sharp jump earlier built on growing hopes that the federal government will ease laws on cannabis.
— Andrew Keshner and Jamie Chisholm contributed to this report
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