US Stocks Fall, Markets Hold Breath for Wednesday CPI Report
Equities slipped Tuesday as tech shares led losses and traders braced for inflation data that could shape Fed rate expectations.
U.S. stocks closed mostly lower Tuesday, August 12, as fading optimism over a potential U.S.-Iran deal, lingering Strait of Hormuz uncertainty, and broad weakness in technology shares pushed the Nasdaq down 0.60% to 26,445.45. The Dow shed 184 points, or 0.34%, while the S&P 500 dropped 0.32% to 7,728.18. The Russell 2000 was the lone major index to finish in positive territory, gaining 0.32% as small-cap names diverged from the broader selloff.
Technology and growth stocks bore the brunt of the selling. On Holding cratered more than 20%, while AppLovin, Datadog, and Alphabet each posted significant losses. Dell, Oracle, and Adobe fell more than 3% apiece. Bucking the trend were AI infrastructure and industrial names: Alcoa, Vertiv, Arista Networks, and ASML all moved higher, signaling that investors continue to distinguish between software-heavy tech and hardware-linked plays tied to data-center demand.
Read more Jim Cramer's Club Dumps Industrial Stock to Buy New AI Play →
Across the Atlantic, European markets closed mixed even as Germany's DAX and Spain's Ibex each notched fresh all-time highs, rising 0.26% and 0.20% respectively. Strong corporate earnings and residual optimism around U.S.-Iran diplomacy provided selective support, though the gains were not broad-based across the region.
Treasury yields retreated modestly, with the 2-year yield falling nearly 2 basis points to 4.220% and the 10-year slipping to 4.692%. The dollar was essentially flat against major peers, with EUR/USD hovering near 1.1540 and USD/JPY around 159.29. On the housing front, July existing-home sales came in at a 4.06 million annualized pace, fractionally above estimates but down 1.7% from June, with the median home price at $434,100.
All eyes now shift to Wednesday's U.S. Consumer Price Index release, which traders expect to be the next decisive input for Federal Reserve policy expectations heading into the September meeting. A hotter-than-expected print could rattle bond markets and renew pressure on rate-sensitive equities. Continue reading at Forexlive.
