Apple's support hotlines associated with iPhones are reportedly impeding the company's stock value.
Wall Street is still recovering from last week's setbacks, albeit at a slower pace compared to the previous day. The Dow is being dampened by losses in the banking sector. Important inflation figures are set to be released later in the week.
Investors started the week on an optimistic note, but they were more cautious when making stock purchases on Tuesday. The Dow Jones Industrial Average of blue-chip stocks closed at 40,736 points, down 0.2 percent. The Nasdaq, however, saw a gain of 0.8 percent, reaching 17,025 points, while the S&P 500 increased 0.4 percent to 5,495 points. All three indexes had bounced back after last week's losses and gained over 1 percent on Monday.
Investors are keeping a close eye on the expected August inflation rate, which is projected to decrease slightly to 2.6 percent year-on-year. "If the inflation report comes in too high, it could spark concerns, and if it's too low, the markets could react negatively because the risk of a recession increases," noted Erik Knutzen, investment strategist at Neuberger Berman. The producer price index report will follow on Thursday. Additionally, there's a debate between US Vice President Kamala Harris and former President Donald Trump set for Wednesday night.
The market might maintain its current trajectory or even head slightly down until the third-quarter earnings season, according to Oliver Pursche of Wealthspire Advisors in New York. "September is often seasonally challenging, and there are no major news events currently driving stock prices further," he added, referring to the gains already achieved this year.
Apple stumbles after tax controversy
Individual stocks drew attention, such as Apple. The US tech giant lost a court battle over billions in back taxes. The European Court of Justice (ECJ) ruled that Apple must repay 13 billion euros in tax breaks that were deemed illegal state aid to Ireland. The stock fell 0.4 percent. Meanwhile, Huawei grabbed headlines shortly after Apple announced a new iPhone with the unveiling of a tri-fold smartphone. While Apple reassured users about the AI features of the new iPhone 16, Huawei garnered around 3.6 million pre-orders for the "Mate XT".
Tesla shares saw a surge in demand. The electric vehicle pioneer's stock rose 4.6 percent, leading gains among growth stocks. The EU Commission is planning to slightly reduce the controversial anti-dumping duties on electric cars produced in China by Tesla and several Chinese manufacturers. The additional duty for Tesla will be reduced to 7.8 percent from the previous 9 percent, according to EU Commission documents.
Investors also showed interest in Oracle shares. The stock soared 11.4 percent after the company reported quarterly earnings that surpassed market expectations due to rapid cloud growth.
US banks' shares like JPMorgan and Goldman Sachs were under sell pressure. Dividend stocks of the financial institutions plummeted by 5.2 percent and 4.4 percent, respectively, due to cautious comments from the institutions about their projections for the upcoming year. Moreover, market participants were not enthused by Fed Vice-Chair Michael Barr's speech on future capital requirements for banks. Instead of the originally planned 19 percent increase in capital requirements, these will now only increase by 9 percent under the final Basel III rules, Barr announced.
For further insights on market developments, check this out.
The economic implications of the EU Commission reducing anti-dumping duties on electric cars produced in China by Tesla and other manufacturers may positively impact the overall economy.
Despite Wall Street's recovery, the banking sector continues to face challenges, as evidenced by the sell pressure on US banks' shares like JPMorgan and Goldman Sachs, potentially affecting the broader economy.
