Ines Ferré
Stock market today: S&P 500, Nasdaq notch fresh records with Apple as CPI, Fed decision loom
In this article:
Two of the three major averages closed at fresh records on Tuesday as Apple (AAPL) soared to new highs. Investors braced for a new reading on consumer prices and for a Federal Reserve decision that should signpost the path of interest rates.
The S&P 500 (^GSPC) gained 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) gained about 0.9% as Apple closed at an all-time high. The Dow Jones Industrial Average (^DJI) dropped roughly 0.3%.
Stocks have managed to make headway in recent days despite market uncertainty about an economy that may be too hot or too cold for comfort. A string of inconclusive data has fueled skepticism about the likelihood of three rate cuts in 2024 as had been envisaged by the Fed in March. Many investors now predict just one reduction before the year's end.
The two-day Fed policy meeting that kicked off Tuesday is heavily expected to end with borrowing costs kept at their two-decade high. Investors will still watch out for hints on when a shift to cuts will come, with September or November in the frame.
Read more: How does the labor market affect inflation?
Investors calculating the rate-reduction odds are also looking ahead to May consumer price data due out on Wednesday, given its crucial role in the Fed's deliberations.
Meanwhile, Apple shined in the world of corporates, as shares rallied more than 7% to close at a new record as Wall Street cheered the iPhone maker's big AI debut.
LIVE COVERAGE IS OVER14 updates
S&P 500, Nasdaq close at fresh records as Apple gains 7%, market eyes Fed decision, inflation print
Stocks gained on Tuesday with the S&P 500 and Nasdaq closing at fresh records ahead of the Fed's interest rate decision due on Wednesday afternoon, and a key inflation print prior to the market open.
The S&P 500 (^GSPC) gained 0.3% while the tech-heavy Nasdaq Composite (^IXIC) rose 0.9%, helped by a 7% rise in Apple (AAPL). Shares of the iPhone maker touched all-time highs on Tuesday as Wall Street weighed in on the company's recently revealed AI features.
The Dow Jones Industrial Average (^DJI) dropped roughly 0.3%.
On Wednesday, investors will digest May's Consumer Price Index (CPI), one of the most important data points that will shape future Federal Reserve interest rate policy.
The Federal Open Market Committee's decision on interest rate cuts will come out at 2 p.m. ET on Wednesday following its two-day meeting, which started today.
CPI preview: Inflation expected to remain stable
On Wednesday, investors will digest one of the most important data points that will shape future Federal Reserve interest rate policy: May's Consumer Price Index (CPI).
The inflation report, set for release at 8:30 a.m. ET, will come just ahead of the central bank's policy decision at 2 p.m. ET. It's expected to show headline inflation of 3.4%, matching April's annual gain in prices, according to estimates from Bloomberg.
Over the prior month, consumer prices are expected to have risen 0.1%, a deceleration from April's 0.3% month-over-month increase. That would also be the smallest month-over-month rise since October 2023.
A decline in energy prices will likely contribute to further downward pressure on headline CPI, according to Bank of America.
"Energy prices likely fell in May on a seasonally adjusted basis owing to a decline in gasoline prices. This likely was a relief for consumers after gas prices had increased in April and March," BofA economists Stephen Juneau and Michael Gapen wrote in a note to clients last week. "With crude prices moving lower, gas prices are likely to continue to decline in the near-term."
On a "core" basis, which strips out the more volatile costs of food and gas, prices in May are expected to have risen 3.5% over last year — a slight slowdown from the 3.6% annual increase seen in April, according to Bloomberg data. Core prices are expected to have climbed 0.3% month over month in May, matching April.
Core inflation has remained stubbornly elevated due to higher costs of shelter and core services like insurance and medical care. But BofA expects those categories "to make a very small step in the right direction."
"Shelter inflation was likely a little firmer this month owing to an increase in lodging away from home prices," said Juneau and Gapen. "However, core services ex shelter should show some moderation as we look for softer increases in several service categories."
Bitcoin sinks to $67,000 per token
Bitcoin (BTC-USD) fell more than 3% Tuesday to hit the lowest level this month. The cryptocurrency traded just around the $67,000 level at 3 p.m. ET.
Crypto-related stocks were also impacted.
Coinbase (COIN) and MicroStrategy (MSTR) were down more than 2%, though off their session lows. Meanwhile, crypto miner Marathon Digital (MARA) erased earlier losses to climb into positive territory in afternoon trading.
S&P 500 flips into green territory
Nasdaq hits fresh record while S&P 500, Dow slip
The Nasdaq Composite (^IXIC) gained 0.4% to hit a new intraday high on Tuesday as Apple (AAPL) stock surged by as much as 6%, also hitting a fresh record.
The S&P 500 (^GSPC) fell about 0.1%, while the Dow Jones Industrial Average (^DJI) was down about 0.6%.
The Nasdaq and S&P 500 notched fresh all-time closing highs in the previous session.
Apple hits first intraday record high of 2024
Apple's (AAPL) stock surged by as much as 6% on Tuesday to reach an intraday record as investors digested the announcement of its AI platform, Apple Intelligence. This marked the first time Apple made an all-time high in 2024.
After the stock fell on Monday during and after the company's WWDC conference, the stock moved higher as some Wall Street analysts cheered the company's announcements.
"If you look at the signal away from the noise, you realize that this is unprecedented capability that Apple is going to introduce and it's going to integrate AI into everyday life," D.A. Davidson managing director Gil Luria told Yahoo Finance.
Following Monday's event, Luria upgraded Apple to Buy from Neutral and raised his price target to $230 from $200.
On Monday, Apple announced "Apple Intelligence," its long-awaited foray into the generative AI space. The company said the platform would be integrated across the company's hardware and software products, ranging from the iPhone and Mac to mail, messages, and photos. Apple Intelligence will be available for the iPhone 15 Pro and iPads and Macs running Apple's M1 series chips and newer later this fall.
Key features of the launch include updates to Siri, which will now be able to, for instance, parse phones for addresses sent in messages or find photos in a phone's photo library based on voice prompts. Apple also launched new software updates for its iPhone, watches, and computer products.
"Our experience with consumer surveys with prior generations of iPhone launches tell us that the hardware upgrade cycle is more driven by a collection of feature upgrades across diverse applications, which in aggregate will provide ...reasons to upgrade over the next few years," JPMorgan senior analyst Samik Chatterjee wrote in a note to clients on Monday.
He added, "The release of the AI features across Mac, iPads and iPhones will support an upgrade cycle across all the devices."
Moderna president: Company outlook 'stabilizing' thanks to new flu-COVID vaccine data
Yahoo Finance's Anjalee Khemlani reports.
Moderna (MRNA) is on its way to getting a third mRNA-based vaccine approved by the FDA if the regulatory agency likes the data released Monday for a combination flu-COVID shot.
The company said the new combo vaccine provided better protection against both diseases than separate shots. It marks the first positive late-stage results of a combination vaccine.
Moderna stock is up almost 20% in the last month after the company received approval from the FDA for its RSV vaccine for older adults.
Read more here.
Trending tickers on Tuesday
Apple (AAPL)
The iPhone maker was the No.1 trending ticker on Yahoo Finance on Tuesday, with shares surging more than 5% to touch record highs as Wall Street cheered the tech giant's AI-related features unveiled on Monday.
Read more here.
Tesla (TSLA)
Shares of the electric vehicle giant fell roughly 3% on Tuesday ahead of an important company shareholder vote this week.
This Thursday, Tesla shareholders will decide whether CEO Elon Musk gets to keep a record-breaking $56 billion compensation package that was awarded in 2018 and then voided this year by a Delaware judge.
Read more here.
Affirm (AFRM)
Affirm shares soared almost 5% after Apple announced it would allow its device users to make purchases using the fintech company's buy now, pay later payment loans, giving them options to pay over time.
Dow drops more than 200 points as Boeing, JPMorgan shares fall
The Dow Jones Industrial Average (^DJI) fell more than 200 points Tuesday, dragged by a fall in Boeing (BA) and JPMorgan (JPM) shares.
The blue-chip index was down 0.5%, underperforming the other major averages. Boeing shares dropped more than 3% while JPMorgan fell 2.5%.
Apple stock (AAPL) was the Dow component outlier on Tuesday. Shares of the iPhone maker touched an all-time high to rise above 5%.
Nasdaq turns positive as Apple hits all-time high
A rise in Apple in stock (AAPL) helped lift the Nasdaq Composite (^IXIC) into green territory on Tuesday.
Shares of the iPhone maker rose 5% to hit an all-time record during the session following the introduction of various AI features on Monday. Shares touched an intraday high of $203.96 each.
The Nasdaq erased earlier losses during the session, rising 0.2%.
Tesla shares fall nearly 3% ahead of key shareholder vote this week
Tesla (TSLA) shares fell nearly 3% on Tuesday ahead of an important shareholder vote this week.
This Thursday, Tesla shareholders will decide whether CEO Elon Musk gets to keep a record-breaking $56 billion compensation package that was awarded in 2018 and then voided this year by a Delaware judge.
On Tuesday, JPMorgan analysts led by Ryan Brinkman wrote an update on a recent meeting with Tesla's director of investor relations, in which various topics were covered, including robo-taxis.
Tesla is expected to introduce a concept model at its “Robo-taxi Investor Day” on August 8.
"Because Tesla expects varying degrees of interest on the part of customers when it comes to placing their private vehicles on a public robo-taxi network, it expects to augment this supply with a dedicated robo-taxi vehicle which will offer cost and utility advantages relative to a traditional consumer vehicle," wrote Brinkman.
He added, "the expected basing of this dedicated robo-taxi on Tesla’s delayed next-generation platform in our view implies timing could be some years away."
Apple rallies almost 3% as Wall Street weighs in on AI-filled event
Apple stock (AAPL) rebounded nearly 3% in early trading on Tuesday as Wall Street analysts weighed in on the iPhone maker's artificial intelligence features introduced at the World Wide Developers Conference yesterday.
“The release of the AI features across Mac, iPads and iPhones will support an upgrade cycle across all the devices” wrote JPMorgan analyst Samik Chatterjee in a note to clients. The analyst has an Overweight rating on the stock.
Meanwhile Apple was raised to a Buy from Neutral with a $230 price target at D.A. Davidson on the “expectation of an iPhone upgrade cycle.”
Investors bought the dip as shares erased the previous session's losses.
Stocks drift lower as market eyes Fed meeting
Stocks opened lower on Tuesday with the Federal Reserve set to kick off its two-day policy meeting.
The S&P 500 (^GSPC) fell about 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) dropped slightly on the heels of fresh all-time closing highs for both indexes. The Dow Jones Industrial Average (^DJI) was down 0.4%.
The major averages have managed to inch higher despite uncertainty about the economy and scaled-back expectations for rate cuts. Most investors anticipate the Federal Reserve will reduce rates only one time before the end of the year.
On Wednesday afternoon, the Federal Open Market Committee (FOMC) is expected to announce its policy decision following a two-day meeting. Monthly inflation data will also be released on Wednesday, prior to the market open.
Apple (AAPL) shares gained about 2% in early trading, reversing losses from the prior session that followed the iPhone maker's introduction of AI features at its World Wide Developers Conference on Monday.
Cryptocurrency-related stocks opened lower on Tuesday as bitcoin (BTC-USD) fell to a one-week low, trading just above $69,000 per token. Coinbase (COIN), Marathon Digital (MARA), and MicroStrategy (MSTR) were all down more than 3% in early trading.
Diverging views on Apple after AI event
There isn't a clear consensus on Apple (AAPL) shares after its hype-filled AI event yesterday.
The Street is giving Apple a high-five on the technology itself, but what is unclear is if it's enough to spur a stock-price-moving iPhone upgrade cycle.
JPMorgan on the event:
"We continue to expect the start of a device upgrade cycle for iPhones later this fall (largely FY25 for Apple) with the upgrade cycle likely peaking with the launch of the iPhone 17 in 2025 (largely FY26 volumes for Apple)."
KeyBanc on the event:
"We believe WWDC is a sell-the-news event where the bulls' view, centered around an "iPhone Super Cycle" triggered by Apple intelligence (AI) being integrated into Apple's products, will likely be seen as disappointing. While WWDC introduces new software features across iOS, iPad OS, macOS, and visionOS that are often useful, they are not compelling, in our view, for the average consumer to purchase a new device."
The stock is down slightly in premarket trading.
