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The U.S. Stock Market Slips, Led By Apple

June 6, 2023
minute read

In early Tuesday trading, U.S. stocks showed a slight decline, primarily driven by Apple, as market indices paused just below multi-month highs ahead of the next week's Federal Reserve policy meeting.

Here's a breakdown of how the stocks are trading:

  • The S&P 500 dipped by 6 points or 0.1% to reach 4,267.
  • The Dow Jones Industrial Average fell by 40 points or 0.1% to reach 33,522.
  • The Nasdaq Composite eased by 35 points or 0.2% to reach 13,194.

On Monday, the Dow Jones Industrial Average fell by 200 points or 0.59% to 33,563, while the S&P 500 declined by 9 points or 0.2% to 4,274, and the Nasdaq Composite dropped by 11 points or 0.09% to 13,229.

Market sentiment remained cautious on Tuesday following Wall Street's recent advance to year-high levels, which faltered in the Monday session.

Stephen Innes, Managing Partner at SPI Asset Management, commented on the situation, stating, "After surpassing 4,300, briefly entering a technical bull-market territory, the S&P 500 rally faced a slight setback as U.S. stocks turned lower due to a weaker-than-expected ISM services sector survey and some uncertainty among investors about the much-anticipated product launch from tech giant Apple."

Apple's shares reached a record intraday high near $185 on Monday but closed the day below $180 after its Worldwide Developers' Conference failed to live up to the hype. With Apple's shares accounting for a 7.5% weighting in the S&P 500 index, this reversal prevented the benchmark from reaching its highest levels since August last year. In Tuesday's early trading, Apple's stock is showing a further 0.9% decline.

On Tuesday, there is a lack of fresh catalysts to drive trading activity, with no significant U.S. economic data or noteworthy company results scheduled for release. Moreover, there are no Federal Reserve speakers ahead of the central bank's policy meeting, which is set to begin next Tuesday. Investors seem relatively calm regarding Fed policy prospects, with the market pricing the chances of no interest rate hike next week at approximately 75%, according to the Trade Algo.

The prospect of a pause in rate hikes may alleviate investor concerns, as such hikes have impacted confidence over the past year. This sentiment could explain why the CBOE Vix index, an option-based indicator of expected S&P 500 volatility, currently stands at 14.72. It is notably below its long-run average of 20 and approaching its lowest levels in three years.

However, there was a reminder from Australia that central banks can still surprise with monetary decisions. The Reserve Bank of Australia unexpectedly raised its main borrowing costs by 25 basis points for the second time in a row, bringing the rate to 4.1%. This move led to a surge in the Australian dollar and a decline in bonds and stocks.

Bryan Curtis
Eric Ng
John Liu
Editorial Board
Bryan Curtis
Adan Harris
Managing Editor
Cathy Hills
Associate Editor

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