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.
Notably, 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.
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.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"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 to go public in blockbuster IPO
Tuesday's headlines were not solely centered on tomorrow's inflation data, though. Also in focus was Arm – the Softbank-owned chipmaker that was once a buyout target of Nvidia (NVDA) – given the company is set to go public this Thursday. Demand for what is arguably the most anticipated upcoming IPO of the year is so high that Arm stopped taking orders Tuesday – a day ahead of schedule.
The Arm IPO is expected to be priced tomorrow at a range of $47 to $51 per share, which would result in $5 billion in new capital for the company and a roughly $54.5 billion valuation.
However, David Trainer, CEO of New Constructs, a research firm powered by artificial intelligence, says this offering creates "a valuation that is completely disconnected from the company’s fundamentals."
Stay away from this IPO, Trainer warns investors, "as we see very limited upside ahead, as there are plenty of other companies in the tech sector that offer investors growth, but at a reasonable valuation."
Apple stock slips after September event
Also on investors' radar Tuesday was Apple (AAPL), which 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.
Meanwhile, amid this week's relatively light earnings calendar, Oracle (ORCL) plunged 13.5% after the cloud software company revealed its results. While Oracle reported higher-than-expected fiscal first-quarter earnings of $1.19 per share, revenue of $12.45 billion fell short of estimates. Additionally, the company forecast lower-than-anticipated fiscal Q2 results.
As for the major indexes, the Dow Jones Industrial Average finished marginally lower at 34,645, while the S&P 500 (-0.6% at 4,461) and the Nasdaq Composite (-1.0% at 13,773) suffered bigger losses.
Related content
-
You Don’t Want to Retire in Portugal: Here Are Three Tax Reasons WhyRetirement Taxes With the NHR benefit retiring and pension taxes increasing, you might rethink your retirement plans in Portugal.
-
Home Depot's Winning Ways Fueled Its 100,000% ReturnHome Depot's wide moat leaves little room for competition – and shareholders have profited as a result.
-
Apple's 100,000% Return Is a Result of Innovation, Brand Loyalty and BuybacksApple spends billions buying back its own shares, but this is just one catalyst behind the incredible growth in its share price.
-
Stock Market Today: Stocks Swing Higher on Powell SpeechInvestors cheered after Fed Chair Powell repeated his confidence in the strength of the U.S. economy.
-
Stock Market Today: Trump's Tariff Reversal Can't Save StocksPanic selling sent the Nasdaq Composite into correction territory, while the Dow and S&P 500 suffered notable losses.
-
Stock Market Today: Dow Drops 670 Points on Trade War EffectA prodigious rally by the battered leader of the AI revolution typified an increasingly volatile picture for investors, traders and speculators.
-
Stock Market Today: Markets Count Down to Tariff DayInvestors, traders and speculators stand by for updates from Washington, D.C., on new terms of global trade.
-
Stock Market Today: Stocks Recover From Trump-Zelensky SlideReports of a combative meeting between the two leaders sent stocks temporarily lower Friday afternoon.
-
Stock Market Today: Mixed Messages Muddle MarketsStocks cruised into pre-market action on encouraging news for the AI revolution but stumbled on yet another policy disturbance.
-
Stock Market Today: Stocks Struggle After Trump's EU Tariff Threats
Stocks pared early gains after Trump threatened the European Union with 25% tariffs.
