U.S. stock futures declined on Tuesday as investors prepared for an upcoming consumer inflation report that is crucial for determining the potential size of the first interest-rate cut by the Federal Reserve in years.
Futures for the S&P 500 and the Dow Jones Industrial Average were trading below the flatline, while contracts for the tech-centric Nasdaq 100 saw a slight dip of about 0.1%.
This downward movement appears to reverse Monday’s significant rebound, which saw major stock indices surge by over 1% as investors engaged in bargain hunting following a market rout. Market volatility remains high as investors fluctuate between optimism for a substantial 0.5% rate cut from the Federal Reserve and concerns about possible recession risks.
Investors are closely monitoring the consumer inflation figures for August, set to be released on Wednesday, as these could significantly influence rate-cut expectations, particularly after the recent jobs report left many guessing.
With the Fed’s policy decision approaching, there is still uncertainty about whether a rate cut of 25 or 50 basis points will happen. The upcoming Consumer Price Index (CPI) update and Thursday’s wholesale inflation report will provide the final inflation insights before the Federal Reserve meets on September 17.
In corporate news, shares of Apple edged down after the company lost a court case in the European Union regarding a $14 billion tax bill, just a day after the launch of its iPhone 16, which was met with disappointment concerning its AI features. In contrast, Oracle’s stock rose over 8% in pre-market trading after reporting earnings that exceeded expectations, driven by strong demand for cloud services.
Additionally, early takeaways from the Goldman Sachs Communacopia conference highlighted a significant technological gap between AMD and Intel, with AMD CEO Lisa Su impressing attendees with the company’s product roadmap. Furthermore, Goldman Sachs tech analyst Toshiya Hari reiterated a Sell rating on Intel, expressing concerns over the company’s ability to restructure, particularly as its stock hovers near a record low.
Investors are also keenly observing how major technology stocks like Nvidia react to the anticipated Fed rate cut next week. Goldman’s software analyst Kash Rangan noted that investors are waiting for a rate reduction to become more optimistic about the tech sector, although he cautioned that the industry needs to improve AI monetization for stock prices to rise significantly. An article in the Wall Street Journal today discusses Oracle’s evolving role as a partner to dominant cloud computing firms rather than as a competitor, a narrative backed by insights from an exclusive interview with Amazon Web Services CEO Matt Garman at the conference.