This morning, the September S&P 500 futures (ESU23) slipped by -0.02%, while the September Nasdaq 100 E-Mini futures (NQU23) dipped by -0.04% as investors braced themselves for a pivotal U.S. consumer inflation report. This report is eagerly awaited as it is expected to offer insights into the Federal Reserve’s upcoming actions.

During Tuesday’s trading session, Wall Street’s leading indices closed lower. Oracle Corporation (NYSE:ORCL) experienced a substantial -13% drop, ranking as the top percentage loser on the S&P 500. This significant decline came after the IT services giant reported a slowdown in cloud revenue and fell short of quarterly sales expectations. Advance Auto Parts Inc (NYSE:AAP) also faced a decline of more than -8% after S&P Global Ratings downgraded the credit and debt ratings of the auto parts retailer to “junk” status. Additionally, Apple Inc (NASDAQ:AAPL) saw a minor decrease of -1% following the introduction of the new iPhone 15 product line and the next-generation Apple Watch. On a positive note, WestRock Co (NYSE:WRK) enjoyed a gain of more than +2% after announcing a merger with Europe’s Smurfit Kappa, forming a packaging giant worth $20 billion. Energy stocks showed strength as well, with the price of WTI crude rising over +1% to nearly a 10-month high.

Thomas Hayes, the chairman at Great Hill Capital LLC, expressed concerns about the recent aggressive uptrend in energy prices, which has raised worries about potential rate hikes by Federal Reserve policymakers in November.

Meanwhile, U.S. rate futures indicate a 7.0% probability of a 25 basis point rate increase at September’s monetary policy meeting and a 38.2% probability of a similar rate hike at the November meeting.

The spotlight today is on the eagerly anticipated U.S. consumer inflation report, with economists forecasting August U.S. CPI to come in at +0.6% m/m and +3.6% y/y, compared to the previous figures of +0.2% m/m and +3.2% y/y. Additionally, investors will closely monitor U.S. Core CPI data, which economists expect to show +0.2% m/m and +4.3% y/y in August, compared to the previous numbers of +0.2% m/m and +4.7% y/y. U.S. Crude Oil Inventories data is also scheduled for release, with economists estimating a figure of -1.912M, compared to last week’s value of -6.307M.

In the bond markets, United States 10-year rates are at 4.307%, up +0.99%.

Meanwhile, the Euro Stoxx 50 futures are down -0.61% this morning, with investors digesting disappointing U.K. growth figures while preparing for the highly anticipated U.S. inflation report later in the day. Technology stocks are leading the market lower. According to data from the Office for National Statistics, the U.K. experienced an unexpected contraction in its economy in July due to strikes in hospitals and schools, along with unusually rainy weather. Market participants are also increasing their bets on European Central Bank policy tightening at its upcoming meeting, following a Reuters report indicating the central bank’s expectations of inflation remaining above 3% next year. In corporate news, Aviva Plc (AV-.LN) rose by over +2% after the British insurer announced its withdrawal from the Singlife joint venture and the sale of its 25.9% stake in Singapore Life Holdings, along with two debt instruments to Sumitomo Life.

Today’s data releases include U.K.’s GDP, U.K.’s Industrial Production, U.K.’s Manufacturing Production, U.K.’s Monthly GDP 3M/3M Change, and Eurozone’s Industrial Production.

• U.K. July GDP was reported at -0.5% m/m and 0.0% y/y, falling short of expectations of -0.2% m/m and +0.4% y/y.
• U.K. July Industrial Production stood at -0.7% m/m and +0.4% y/y, below expectations of -0.6% m/m and +0.5% y/y.
• U.K. July Manufacturing Production came in at -0.8% m/m and +3.0% y/y, surpassing expectations of -1.0% m/m and +2.7% y/y.
• U.K. July Monthly GDP 3M/3M Change was at +0.2%, slightly below expectations of +0.3%.
• Eurozone July Industrial Production arrived at -1.1% m/m and -2.2% y/y, missing expectations of -0.7% m/m and -0.3% y/y.

Asian stock markets closed in the red today, with China’s Shanghai Composite Index (SHCOMP) down -0.45% and Japan’s Nikkei 225 Stock Index (NIK) down -0.21%. In China, investors are awaiting further indications of stimulus measures to support the economy while also keeping an eye on the crucial U.S. inflation data. A BofA Securities survey on Asia fund managers revealed lackluster sentiment regarding China, citing easing expectations and a lack of concerted action, which has pushed risk appetite to its lowest point. Information technology, semiconductors, and new energy stocks witnessed declines. On the positive side, Chinese property developers outperformed after beleaguered developer Country Garden Holdings Co Ltd received creditor support to extend repayment on seven yuan bonds. Investor attention for the week remains focused on the upcoming data releases of Chinese retail sales and industrial production for August, scheduled for Friday.

Japan’s Nikkei 225 Stock Index closed slightly lower today, with investors exercising caution as they await crucial U.S. inflation data. Data from Wednesday showed that Japan’s annual wholesale inflation decelerated in August for the eighth consecutive month. Additionally, a Reuters poll indicated a decrease in business confidence among Japan’s largest firms in early September, reflecting growing concerns about a slowdown in China, one of Japan’s significant export markets. The Nikkei Volatility, which accounts for the implied volatility of Nikkei 225 options, closed up +1.54% at 16.48.

The Japanese August PPI stood at +0.3% m/m and +3.2% y/y, compared to expectations of +0.1% m/m and +3.2% y/y.

In pre-market U.S. trading, several notable stock movements include:

• Workhorse Group Inc (WKHS) surging by over +22% after the company received IRS approval as a qualified manufacturer for the Commercial Clean Vehicle Credit under the Internal Revenue Code.
• Rocket Pharmaceuticals Inc (RCKT) soaring more than +18% after announcing alignment with the Food and Drug Administration for the global Phase 2 pivotal trial of RP-A501 for Danon Disease.
• Ford Motor Company (F) rising by over +1% as UBS initiated coverage of the stock with a Buy rating.
• Squarespace Inc (SQSP) sliding by more than -3% after pricing a secondary underwritten public offering of 5 million shares of its Class A common stock.
• Eiger Biopharmaceuticals Inc (EIGR) plunging by over -34% after the company announced the discontinuation of its late-stage trial of peginterferon lambda in patients with chronic hepatitis D.

Today’s U.S. earnings spotlight includes the following companies:

• Burford (BUR)
• Cracker Barrel Old (CBRL)
• Semtech (SMTC)
• Rev Group (REVG)
• IBEX (IBEX)
• Radiant (RLGT)
• Selectquote (SLQT)

Featured Image: Unsplash

Please See Disclaimer