Wall Street ends lower as Oracle tumbles on weak forecast

US stock market: The S&P 500 declined 0.57 per cent to end the session at 4,461.91 points. The Nasdaq declined 1.04 per cent to 13,773.62 points, while Dow Jones Industrial Average declined 0.05 per cent to 34,645.99 points.

US stock market: The S&P 500 declined 0.57 per cent to end the session at 4,461.91 points. Image: Reuters

US stock market: Wall Street stocks ended lower on Tuesday as Oracle shares tumbled more than 13 per cent after a weak forecast and surging oil prices deepened worries about persistent price pressures ahead of crucial inflation readings this week. Oracle (ORCL.N) shares dived to their lowest since June after the cloud services provider forecast current-quarter revenue below targets and narrowly missed first-quarter expectations.

Cloud-computing heavyweights Amazon.com (AMZN.O) and Microsoft (MSFT.O) each fell more than 1 per cent, pressured by Oracle's weak forecast and by a rise in U.S. Treasury yields. Oil prices jumped more than 1 per cent, building on a recent rally and stoking worries that sticky inflation could mean U.S. interest rates stay higher longer in the aftermath of strong economic data.

"People are a little bit worried about energy prices picking up pretty aggressively in recent weeks and that creates some concerns as we look forward to November" when some investors worry Federal Reserve policymakers may raise rates again, said Thomas Hayes, chairman at Great Hill Capital LLC. Investors are awaiting August consumer price index data due on Wednesday and producer prices reading scheduled for Thursday to gauge the outlook for U.S. interest rates ahead of the Fed's meeting on Sept. 20.

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Interest rate traders see a 93 per cent chance of rates remaining at the current levels in September but just a 56 per cent likelihood of a pause at the November meeting, according to the CME FedWatch Tool. "All the all the inputs that we get between now and the November meeting will be important, especially those related to inflation. So that thrusts a lot of importance on tomorrow's CPI report," said Art Hogan, chief market strategist at B Riley Wealth.

Investors will also monitor the European Central Bank's policy decision on Thursday, when it is seen holding rates after nine consecutive hikes. Apple (AAPL.O) dropped 1.8 per cent after unveiling new iPhones, while not increasing prices as it faces a global smartphone slump. The stock was also hurt by a report that China's Huawei Technologies has raised the second-half shipment target for its Mate 60 series smartphone by 20 per cent.

The S&P 500 declined 0.57 per cent to end the session at 4,461.91 points. The Nasdaq declined 1.04 per cent to 13,773.62 points, while Dow Jones Industrial Average declined 0.05 per cent to 34,645.99 points. Of the 11 S&P 500 sector indexes, eight declined, led lower by information technology (.SPLRCT), down 1.75 per cent, followed by a 1.06 per cent loss in communication services (.SPLRCL). The energy index (.SPNY) added 2.31 per cent.

Volume on U.S. exchanges was relatively light, with 9.4 billion shares traded, compared to an average of 9.9 billion shares over the previous 20 sessions. The most traded stock in the S&P 500 was Tesla , with $36.7 billion worth of shares exchanged during the session. The electric car maker declined 2.23 per cent. WestRock (WRK.N) jumped 2.8 per cent after agreeing to merge with Europe's Smurfit Kappa (SKG.I) to create the world's largest listed paper and packaging company, worth nearly $20 billion.

Advance Auto Parts (AAP.N) dropped about 8 per cent after S&P Global downgraded the auto parts retailer's credit and debt ratings from investment grade (BBB-) to junk (BB+). Zions Bancorp (ZION.O) jumped 6.8 per cent after the U.S. regional lender posted a slight increase in its monthly net interest income growth. Declining stocks outnumbered rising ones within the S&P 500 (.AD.SPX) by a 1.4-to-one ratio. The S&P 500 posted 12 new highs and 14 new lows; the Nasdaq recorded 48 new highs and 184 new lows.

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