U.S. stocks started the week on a downward trajectory as Oracle’s less-than-rosy outlook disappointed investors. Attention now turns to the forthcoming release of August’s inflation figures, a report that could significantly influence the Federal Reserve’s interest rate decision later this month.
As of 11:15 ET (15:15 GMT), the Dow Jones Industrial Average declined by 29 points, marking a 0.1% drop, while the S&P 500 experienced a 0.5% decrease, and the NASDAQ Composite witnessed a 0.8% decline.
In the previous session, all three major Wall Street indices concluded with gains, led by the tech-heavy Nasdaq, which surged by 1.1%. Tesla (NASDAQ:TSLA) played a pivotal role in this rally, with investor optimism centered around artificial intelligence. The Dow, representing blue-chip stocks, closed 0.3% higher, and the broader S&P advanced by 0.7%.
Weak Oracle Guidance Takes Its Toll
The positive momentum from Monday dissipated as Oracle (NYSE:ORCL) presented a disappointing revenue forecast for the current quarter, which was released after Monday’s closing bell. A challenging economic climate has exerted pressure on business cloud spending, leading the computer software giant to project second-quarter revenue growth between 5% and 7%, falling short of analysts’ average estimate of 8.2%. Consequently, Oracle’s stock price plummeted by 11.7%.
Oracle has been grappling with the need to catch up in a cloud segment dominated by more significant competitors after a surge in cloud demand during the pandemic. The reevaluation of digitization plans by businesses has further added to Oracle’s challenges.
Apple’s “Wonderlust” Event Draws Attention
Elsewhere, Apple (NASDAQ:AAPL) commands attention as the world’s most valuable company prepares to host its annual fall hardware update in California, known as “Wonderlust” this year.
Anticipation is high for Apple’s unveiling of the new iPhone 15, which is expected to come with an array of new features and, potentially, a slightly higher price tag for the Pro models compared to their predecessors.
Despite a recent dip in iPhone revenues, the smartphone segment remains of paramount importance, accounting for approximately half of Apple’s total sales.
U.S. Inflation Data to Influence Market Sentiment
Tuesday featured economic data that included the NFIB Small Business Optimism Index for August. It slightly deteriorated, falling to 91.3 from July’s 91.9, marking the index’s first decline in four months.
However, the spotlight for the week shines on Wednesday’s release of the Consumer Price Index (CPI) for August. There are concerns that increased energy costs may lead to an upward surprise in the CPI.
While the Federal Reserve is widely expected to pause its interest rate hikes this month, policymakers have consistently emphasized that it is premature to declare victory over inflation.
Crude Oil Prices Rise Ahead of OPEC Report
Oil prices advanced on Tuesday, continuing the positive sentiment triggered by Saudi Arabia and Russia extending their voluntary supply cuts until year-end.
Market participants are keenly awaiting the monthly report from the Organization of the Petroleum Exporting Countries (OPEC), set to be released later in the day. Of particular interest are forecasts regarding Chinese demand, amid diminishing expectations that China will drive oil demand to record levels this year.
Additionally, industry data on U.S. crude stocks from the American Petroleum Institute is expected later in the session, with forecasts suggesting a continuation of the recent trend of draws.
