Apple's progress is being hindered due to delays in obtaining justice and finding comfort following setbacks.
Following a hopeful commencement to the trading week, US investors showed some restraint in their stock acquisitions. The Dow Jones Industrial Average, comprising distinguished companies, concluded Tuesday's session with a 0.2% decrease, settling at 40,736 points. Meanwhile, the tech-centric Nasdaq soared 0.8% to 17,025 points, and the comprehensive S&P 500 incremented 0.4% to 5,495 points. These market indicators displayed a sense of stabilization following last week's losses, recording upticks of over 1% on Monday.
Investors are eagerly anticipating the unveiling of the August inflation rate on Wednesday, projected to show a minimal decline to 2.6% year-over-year. As per Erik Knutzen, investment strategist at Neuberger Berman, "If the inflation report exceeds expectations, there could be concern, whereas if it falls short of expectations, the markets might react negatively due to an increased risk of a recession." Additionally, the report on producer prices will be released on Thursday. In the wee hours of Wednesday (MEZ), the first televised debate between US Vice President Kamala Harris and former President Donald Trump is set to take place.
The market is likely to remain unstable or mildly bearish until the third-quarter earnings season, according to Oliver Pursche of Wealthspire Advisors in New York. "September tends to pose seasonal challenges, as there is a scarcity of significant developments to maintain stock prices ascension," he mentioned.
Apple experiences setback after tax ruling
Apple was a prominent stock in focus. The tech giant encountered a legal defeat over outstanding tax payments. The European Court of Justice (ECJ) established that Apple would need to refund €13 billion (US$13.8 billion) in tax incentives, passed off as illegal state aid to Ireland. The stock prices dipped by 0.4%. This unfavorable turn of events was shortly followed by Huawei's reveal of a tri-fold smartphone, stealing some of Apple's limelight post the launch of the iPhone 16. Though Apple welcomed users to the AI capabilities of the future iPhone 16, Huawei reported around 3.6 million pre-orders for the "Mate XT."
Tesla shares witnessed a surge in demand. The pioneer of electric vehicles saw an increase of 4.6% in its stock price, leading among growth stocks. The EU Commission indicated plans to slightly diminish the controversial anti-dumping tariffs on electric cars produced in China by Tesla and several Chinese manufacturers, with Tesla's additional tariff rate being lowered to 7.8% from the prior 9%.
Investors also benefited from Oracle shares. The stock prices escalated by 11.4% after the company unveiled a quarterly outcome that surpassed projections, thanks to its rapid cloud expansion.
Shares of the US banks, JPMorgan and Goldman Sachs, occupy a significant position on investors' sell lists. The dividend stocks of these financial institutions saw declines of 5.2% and 4.4%, respectively, attributed to hesitant forecasts for the forthcoming year by the institutions. Reactions to Fed Vice Chairman Michael Barr's speech regarding future capital requirements for banks also contributed negatively. Instead of the originally proposed 19% rise in capital requirements under the final Basel III rules, they now will only increase by 9%, Barr revealed. Although the capital requirements for the largest US banks may be moderated, the change falls short of the initial anticipations.
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Despite Apple's legal setback, resulting in a 0.4% decrease in its stock price due to a tax ruling by the European Court of Justice, the Dow Jones Industrial Average, which includes distinguished companies, still experienced a 0.2% decline on Tuesday.
The strong performance of Tesla's shares, climbing by 4.6%, was one of the positive aspects in the tech sector, as the company's electric vehicles continued to gain popularity, with the EU Commission planning to reduce anti-dumping tariffs on electric cars produced in China, including Tesla.
