NEW YORK: The S&P 500 and Nasdaq fell on Tuesday as a jump in oil prices deepened worries about persistent price pressures ahead of crucial inflation readings this week, while Oracle slumped on downbeat forecast and results.
Oil prices jumped more than 1% on Tuesday, building on a recent rally and stoking worries over sticky inflation in the aftermath of strong economic data, clouding the chances of an end to US monetary policy tightening.
“People are a little bit worried about energy prices picking up pretty aggressively in recent weeks and that creates some concerns as we look forward to November,” said Thomas Hayes, chairman at Great Hill Capital LLC.
Investors now keenly await August consumer prices data due on Wednesday and producer prices reading scheduled for Thursday to gauge the outlook for US interest rates ahead of the Federal Reserve’s monetary policy outcome on Sept. 20.
Traders still see a 93% chance of rates remaining at the current levels in September and a near 56% likelihood of a pause in November, as per the CME FedWatch Tool.
Investors will also monitor the European Central Bank’s policy decision on Thursday, where it is seen holding rates after nine consecutive hikes.
Weighing down the S&P 500, cloud-services provider Oracle dropped 11.3% to its lowest intra-day level in three months, after forecasting current-quarter revenue below targets and narrowly missing first-quarter expectations.
While higher oil prices fanned inflation fears, they lifted energy stocks by 2% to lead gains among major S&P 500 sector indexes.
Megacaps Amazon.com, Microsoft and Meta platforms dropped between 1.3% and 1.6%, respectively, also pressured by a rise in US Treasury yields.
Apple lost 1.4% on a report that China’s Huawei Technologies has raised the second-half shipment target for its Mate 60 series smartphone by 20%.
Investors also awaited new iPhone 15 lineup launch amid uncertainty over market access in China and intensifying competition.
At 11:37 a.m. ET, the Dow Jones Industrial Average was up 21.31 points, or 0.06%, at 34,685.03, the S&P 500 was down 15.17 points, or 0.34%, at 4,472.29, and the Nasdaq Composite was down 89.58 points, or 0.64%, at 13,828.31.