Wall Street news/ Oracle stock drop/ inflation report/ Federal Reserve updates/ AI stocks decline/ NEW YORK/ Newslooks/ J. Mansour/ Morning Edition/ U.S. stock indexes showed little movement Tuesday as Wall Street awaited Wednesday’s crucial inflation data. Oracle’s disappointing quarterly growth pulled tech stocks down, while AI-related companies like C3.ai also faced losses. Treasury yields rose slightly, reflecting anticipation of the Federal Reserve’s next moves on interest rates.
Stock Market Updates: Quick Looks
- Market Overview: S&P 500 remains steady, Dow slips 0.3%, Nasdaq rises 0.4%.
- Oracle Drops: Stock falls 9.2% on weaker-than-expected quarterly growth.
- AI Sector Declines: C3.ai down 6.9%, revising its annual loss forecast upward.
- Inflation Focus: Treasury yields edge higher ahead of Wednesday’s consumer inflation data.
- Other Movers: Alaska Air up 12.2% on holiday travel demand; Toll Brothers falls 5.4%.
Wall Street Holds Steady Before Key Inflation Updates
Deep Look
Wall Street remained subdued on Tuesday as investors braced for Wednesday’s key inflation report, which could shape Federal Reserve policy and market direction heading into 2024. The S&P 500 was unchanged after retreating from a record high on Monday, while the Dow Jones Industrial Average fell 0.3%, and the Nasdaq Composite gained 0.4%.
Tech Sector Pressures
Oracle weighed heavily on the market, with its stock plunging 9.2%. Despite strong demand for AI-related cloud infrastructure, the company’s growth narrowly missed Wall Street’s expectations. CEO Safra Catz emphasized record demand for generative AI technology, but Oracle’s meteoric 81% stock rise this year set high expectations that were difficult to meet.
Other AI-related companies also struggled. C3.ai saw a 6.9% decline after revising its projected losses for the fiscal year. While the company reported a smaller-than-expected loss for the latest quarter, concerns over its profitability dampened investor confidence.
Bond Market and Inflation Outlook
Treasury yields edged higher as the market anticipated Wednesday’s inflation report. Economists predict the data will show inflation holding steady compared to last month. The 10-year Treasury yield rose to 4.22% from 4.20%, reflecting cautious optimism ahead of Thursday’s wholesale inflation report.
These inflation updates will be pivotal for the Federal Reserve as it prepares for next week’s meeting, where investors largely expect a third interest rate cut for the year. While the Fed’s efforts have cooled inflation near its 2% target, mortgage rates remain volatile, impacting sectors like housing.
Mixed Results Across Sectors
- Housing Industry: Homebuilder Toll Brothers dropped 5.4% despite reporting better-than-expected earnings. Persistent high mortgage rates continue to pressure the housing market.
- Airline Gains: Alaska Air Group surged 12.2% after raising its profit outlook for the holiday quarter. The airline also announced a $1 billion stock buyback plan.
- Pharmaceutical Strength: Eli Lilly rose 1%, driven by strong demand for its obesity and diabetes drugs. The company also increased its dividend and unveiled a $15 billion stock repurchase plan.
Global Markets
International markets saw mixed performances. In China, Shanghai’s index rose 0.6% despite disappointing export data for November, while Hong Kong’s index slipped 0.5%.
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