Futures Edge Lower as Investors Focus on Inflation and Debate Outcome
U.S. stock futures slipped on Wednesday as investors digested the heated presidential debate between Donald Trump and Kamala Harris, while awaiting key U.S. inflation data, which could influence the Federal Reserve’s upcoming monetary policy decision.
By 03:34 ET (07:34 GMT), Dow futures fell by 95 points or 0.2%, S&P 500 futures dropped 11 points or 0.2%, and Nasdaq 100 futures slipped by 47 points or 0.3%.
Despite these declines, both the S&P 500 and Nasdaq Composite had posted two consecutive days of gains for the first time since mid-August in the previous session. However, the Dow Jones Industrial Average retreated as bank stocks were under pressure following JPMorgan Chase’s (NYSE
) caution that analyst forecasts for its 2024 earnings were overly optimistic. Additionally, Goldman Sachs CEO David Solomon predicted a 10% drop in the bank’s trading revenue for the current quarter.
Traders are now awaiting the August U.S. consumer price index (CPI) release, a key inflation metric that could offer clues on the size of a potential interest rate cut at the Fed’s upcoming two-day meeting.
Trump-Harris Debate Yields Few Policy Details
The debate between Republican Donald Trump and Democratic challenger Kamala Harris on Tuesday left investors with limited insight into how either candidate might address crucial economic issues such as tariffs, taxes, and regulation. While both are neck-and-neck in national polls, their platforms diverge, with Trump advocating for corporate tax cuts and stricter tariffs, while Harris is focused on raising corporate taxes.
During the debate, Harris criticized Trump’s tariff policies, arguing they are tantamount to a tax on the middle class, while Trump defended his position, stating it would not result in higher consumer prices. Trump also accused Harris of overseeing elevated inflation during the Biden administration. Following the debate, the Chinese yuan strengthened against the dollar, as trade tensions between Washington and Beijing were revisited.
GameStop’s Stock Drops on Share Issuance Plans
GameStop’s stock plummeted more than 10% in after-hours trading following its announcement of plans to issue 20 million additional shares, despite posting lower-than-expected second-quarter revenue. The company intends to use the proceeds for “general corporate purposes” including potential acquisitions.
For the quarter ending August 3, GameStop reported revenues of $798.3 million, down from $1.16 billion in the prior year, as the retailer continued to struggle with the shift to online gaming and weak performance at its physical stores.
Chinese Biotech Stocks Rebound Following U.S. House Bill
Several Chinese biotech firms, including WuXi AppTec, Beigene, Akeso, and Sino Biopharmaceutical, regained ground on Tuesday after falling earlier in the week due to a U.S. House bill aimed at restricting their U.S. operations on national security grounds. The bill, which could impact Chinese firms’ access to U.S. markets, must still pass the Senate before reaching President Biden’s desk.
Oil Prices Rebound Amid Hurricane Concerns
Oil prices rebounded in European trading on Wednesday, buoyed by supply concerns due to Hurricane Francine’s potential impact on Gulf of Mexico production. The rise was also supported by data showing an unexpected draw in U.S. oil inventories.
By 03:34 ET, Brent oil futures rose 1.3% to $70.11 per barrel, while West Texas Intermediate (WTI) futures increased by 1.4% to $66.05 per barrel. This recovery followed steep losses from the previous day, driven by weak Chinese import data and a downward revision of OPEC’s demand forecast.
Apple’s iPhone 16 Series and Arm’s AI Potential
BofA analysts note that the new iPhone 16 series from Apple (AAPL) is expected to have carrier subsidies similar to last year, with slightly better deals for the iPhone 16 Pro. Verizon’s trade-in credits vary by plan, T-Mobile offers a $1,000 credit for any device valued over $50, and AT&T provides the same $1,000 credit for trade-ins valued over $180, or $830 for lower-valued devices. BofA maintains a Buy rating for Apple with a $256 price target.
Meanwhile, Morgan Stanley highlighted the launch of Apple’s iPhone 16, which features the A18 processor. Arm (ARM), which powers the device, remains a top pick for its potential in Edge AI, according to the firm, with mobile expected to be the first growth driver. Arm is rated Overweight, with a price target of $175.
Nvidia CEO Sells Shares
In a regulatory filing, Nvidia disclosed that CEO Jen Hsun Huang sold 240,000 shares of common stock between September 6-9, totaling $25 million as part of an option exercise.
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