Tech Stocks Dip Following Oracle’s Disappointing Numbers; Euro Weakens

Tech stocks experienced a decline after Oracle Corp. (ORCL) reported sluggish cloud sales. The euro and pound also faced depreciation, raising concerns of possible stagflation in Europe.

The Nasdaq 100 Index futures are down by 0.3%, indicating a reversal from the 1.2% rise witnessed previously. Europe’s Smurfit Kappa Group also took a hit, dropping by 13% after announcing its merger with WestRock Co.

Tech stocks will likely be under the microscope this Tuesday. Apple Inc. (AAPL) is set to introduce its new product lineup, while SoftBank-owned Arm Ltd. is on the brink of launching this year’s largest initial public offering. Oracle’s performance, on the other hand, draws attention to the potential pitfalls of investing in trending tech shares.

A 10% dip was recorded in Oracle’s premarket trading. Morgan Stanley analysts pointed out that Oracle’s performance has sparked concerns about the realization of generative AI demand into tangible revenue.

On the European front, both the euro and pound depreciated by about 0.4% against the dollar. The UK’s wage growth remained consistently high, hinting at ongoing inflationary pressures, which might drive the Bank of England to reconsider its interest rates. German investor confidence experienced a boost for the second consecutive month, although it might not be enough to alleviate concerns about Germany’s diminishing growth in Europe.

US inflation figures are scheduled for release on Wednesday. The Fed Bank of New York’s recent survey suggested stable inflation expectations among US consumers in August, but there were growing apprehensions about personal finances and job market outlook.

Wednesday’s consumer-price index report will shed light on the Federal Reserve’s possible next steps to realign inflation to its target.

Asian stock markets showed mixed responses, and China’s shares returned to a decline. Despite positive news surrounding Country Garden Holdings Co., the overall sentiment couldn’t maintain its positivity.

In the world of currencies, the yen experienced a decline, and the US dollar stabilized after its most significant two-month drop. The yuan remained stable after China’s central bank fixed its daily rate against the dollar, signaling reluctance towards an excessively weak yuan. The Japanese government saw robust demand for its five-year bond auction, marking the first sale post-central bank Governor Kazuo Ueda’s impactful comments on the negative interest rate policy.

In the commodities sector, oil prices showed a slight rise, staying close to this year’s peak levels. Gold remained stable.

Key Weekly Highlights:

  • Apple plans to launch the iPhone 15 and next-gen smartwatches during its “Wonderlust” event.
  • Several significant economic data points and meetings are scheduled across Japan, Eurozone, UK, and the US.
  • Leading tech personalities like Elon Musk and Mark Zuckerberg are slated to attend a future of AI forum orchestrated by Senator Chuck Schumer.

Major Market Moves:

  • S&P 500 futures dropped by 0.2%.
  • MSCI Asia Pacific and MSCI Emerging Markets Index saw minor changes.
  • Euro depreciated to $1.0706, and the British pound to $1.2460.
  • Bitcoin increased by 4.2%, with Ether following closely at a 4.3% rise.
  • Brent crude rose to $91.30 a barrel, while spot gold dropped to $1,909.57 an ounce.

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Tech Stocks Dip Following Oracle’s Disappointing Numbers; Euro Weakens

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