Stock index futures for September indicate caution among investors as they brace for key U.S. inflation data, and Oracle Corporation’s disappointing first-quarter results have contributed to market hesitancy.
September S&P 500 futures (ESU23) and September Nasdaq 100 E-Mini futures (NQU23) have dipped by -0.23% and -0.26%, respectively. Market participants are exercising caution and refraining from taking significant positions as they await the release of crucial U.S. inflation data scheduled for Wednesday.
In Monday’s trading session, Wall Street’s major indices closed in positive territory. Tesla Inc (NASDAQ:TSLA) saw significant gains of over +10%, making it the top percentage gainer on the Nasdaq 100. Morgan Stanley’s upgrade of the stock to “Overweight” from “Equal-Weight” and optimism surrounding its Dojo supercomputer’s potential to increase its market capitalization by as much as $500 billion drove the surge. Additionally, Qualcomm Incorporated (NASDAQ:QCOM) saw an increase of more than +3% after announcing an extension of its agreement with Apple to supply 5G chips until at least 2026. On the downside, Rtx Corp (NYSE:RTX) plunged by more than -7% following a cut in the company’s full-year sales outlook.
A survey conducted by the New York Fed revealed that U.S. consumers’ inflation expectations remained relatively stable in August. However, households expressed growing concerns about their finances and a more pessimistic outlook on the job market.
Oracle Corporation (NYSE:ORCL) faced a substantial setback, with its stock dropping over -9% in pre-market trading. The company’s first-quarter report showed a slowdown in cloud revenue, while its quarterly sales fell short of expectations.
The U.S. economic data calendar is relatively light on Tuesday, with investor attention centered on the upcoming U.S. inflation data scheduled for release on Wednesday. Jay Bryson, managing director and chief economist at Wells Fargo Corporate & Investment Banking, noted, “Even if the August core CPI surprises to the upside, we doubt it would spur the FOMC to hike again next week.”
U.S. rate futures indicate a 7.0% probability of a 25 basis point rate increase at the September FOMC meeting and a 39.8% chance of a 25 basis point rate hike at the November FOMC meeting.
In the bond markets, United States 10-year rates currently stand at 4.284%, representing a -0.09% decrease.
Euro Stoxx 50 futures have declined by -0.23% as investors digest regional economic data and await crucial U.S. inflation data. Healthcare stocks have gained ground while technology stocks underperformed. The United Kingdom’s labor market weakened, but wage growth remained at a record high. German investor sentiment unexpectedly improved in September, driven by expectations of a pause in interest rate hikes. Associated British Foods Plc (ABF.LN) climbed over +5% after boosting its annual profit guidance for the second time in four months.
Various economic data, including U.K.’s Average Earnings Index +Bonus, U.K.’s Claimant Count Change, U.K.’s Employment Change 3M/3M, U.K.’s Unemployment Rate, Spain’s CPI, Germany’s ZEW Economic Sentiment, and Eurozone’s ZEW Economic Sentiment, were released on Tuesday, with mixed results.
Asian stock markets had mixed performances, with China’s Shanghai Composite Index (SHCOMP) closing down -0.18%, while Japan’s Nikkei 225 Stock Index (NIK) closed up +0.95%. China’s economic stability and policy measures were closely monitored by investors, while Japan’s Nikkei benefited from a weaker yen, boosting export-oriented stocks and risk appetite.
Chinese property developer Country Garden Holdings Co Ltd gained over +3% after securing approval from creditors to extend repayments on six onshore bonds by three years. Goldman Sachs is optimistic about Chinese equity, anticipating a tradable recovery in the latter part of 2023.
In the U.S. pre-market trading, several notable stock movers include:
- Sight Sciences Inc (NASDAQ:SGHT), is down more than -31% after providing weaker-than-expected Q3 revenue guidance and lowering its FY23 revenue forecast.
- Acelyrin Inc (NASDAQ:SLRN), is down about -56% following the announcement that its primary drug, izokibep, failed a mid-stage clinical trial in the treatment of the skin disorder hidradenitis suppurativa.
- Geron Corporation (NASDAQ:GERN), is up over +5% after Goldman Sachs upgraded the stock to Buy from Neutral.
- AerCap Holdings NV (NYSE:AER), is down more than -5% after announcing the pricing of a secondary offering of 40.68 million of its ordinary shares by GE Capital US Holdings Inc, a wholly-owned subsidiary of General Electric.
- CVS Health Corp (NYSE:CVS), up about +0.8% after Wolfe Research upgraded the stock to Outperform from Peer Perform.
- Perion Network (NASDAQ:PERI), is down over -1% after Raymond James downgraded the stock to Market Perform from Outperform.
Today’s U.S. earnings spotlight includes companies like InnovAge Holding (NASDAQ:INNV), Lovesac (NASDAQ:LOVE), Evolution Petroleum (NYSE:EPM), WildBrain (WLDBF), Lesaka Tech (NASDAQ:LSAK), Mama’s Creations (NASDAQ:MAMA), and Anixa Biosciences (NASDAQ:ANIX).
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Author Faith Yakubu 
