The S&P 500 ended Tuesday with a slight dip of 0.02%, closing at 7,805.45, just below its recent record high. The Nasdaq and Dow also saw minor declines, losing 0.15% and 0.18% respectively. Investors adopted a cautious stance ahead of the upcoming US inflation report, which could significantly impact rate expectations. The market's small moves masked a busy underlying environment, with key sectors like semiconductors and banking facing challenges.
Semiconductor stocks took a hit, with Micron dropping 3.6% and Applied Materials falling nearly 7%. Concerns over competition, particularly from Chinese memory producer CXMT, weighed on the sector. Meanwhile, major banks failed to sustain early buying momentum, with Citigroup down 5.6%, Wells Fargo off 3.1%, and JPMorgan and Goldman Sachs also declining. Apple's stock closed at $341.27 after unveiling its HomeView setup and updated home devices.
Asian markets showed resilience, with South Korea’s Kospi gaining 1.8% and Japan’s Nikkei edging up 0.2%. China’s export growth of 36.3% annually and rising producer prices added complexity to the economic outlook. The dollar index eased slightly, providing some relief to other currencies ahead of the CPI data. Oil prices rose, with Brent crude nearing $106.60 and US crude approaching $94.96, as supply concerns persisted following Houthi attacks on Saudi Arabia.
Gold held steady near $4,160 an ounce, while Bitcoin traded around $83,700, extending its recovery after a 1.6% gain the previous day. Both assets face the upcoming inflation test, which could impact their stability. The US CPI report, expected to show 3.6% annual headline inflation, will be closely watched for its potential to influence Fed rate hike probabilities.