Markets sink with record losses in September: Nvidia falls, waiting for Apple’s results
September continues to be a challenging month for financial markets. Over the past four years, this month has seen significant corrections, with an average loss of 5.7%. Over the past three consecutive years, September losses were the highest all year. The first week of the month confirmed this trend, with the S&P 500 failing to close even a single session higher, marking a weekly decline of 4.25%. This represents the worst weekly loss of the yearsuch a negative performance has not been seen since March 2023.
Macroeconomic concerns about the health of the world’s leading economy, combined with those about China, have also had negative repercussions on Europe, with the Germany particularly hard hitand on the oil market. Added to all this was the uncertainty linked to the tech sector, in particular artificial intelligence (AI), with heavy sales on Nvidia (-13.86% weekly, the worst of the year, with approximately 406 billion dollars of capitalization burned), Broadcom (-15.9%) and the entire semiconductor sector (SOXX -11.7%), which recorded the worst weekly performance of 2024.
Energy and Oil Sectors Down – Forced to Hope for Hurricanes?
The energy sector also suffered, ending the week down 5.42%, followed by technology (-6.22%). The price of West Texas Intermediate fell below $70 a barrel, erasing gains for the year. Ample inventories and the end of the summer driving season have put further pressure on the gasoline market. In response, OPEC+ decided to postpone its planned October production increases to December. However, one element that could support prices is the threat of hurricanes. The National Hurricane Center reported that a weather system in the Gulf of Mexico could develop into a hurricane, threatening the northwest Gulf Coast, where about 60% of U.S. refining capacity is located.
Crucial Week for Inflation and ECB Decisions
The week will be particularly important for the markets, with a series of key events that could influence investor sentiment. In the United States, the spotlight will shift from the labor market to inflation. Expectations are for the annual rate to decline for the fifth consecutive month, to 2.6%, which would be the lowest level since March 2021. This could reinforce the belief that inflationary pressures are easing, further moving the Federal Reserve towards a more accommodative monetary policy. However, on a monthly basis, both the consumer price index (CPI) and the core index are forecast to rise by 0.2%, in line with the July reading, suggesting that the process of reducing inflation may be more gradual than expected.
In addition to the CPI, the producer price index (PPI) will draw a lot of attention. Analysts are expecting both the core and headline PPI to rise 0.2% month-over-month, up from previous readings (+0.1% and 0%, respectively). These numbers will be crucial for the Fed, as they are the last set of data that members of the Federal Open Market Committee (FOMC) will evaluate before deciding on the next possible rate cut. Even though inflation seems under control, market concerns are slowly shifting away from the inflationary front to the employment one, with an increasing attention to the signs of weakness in the labour market.
In Europe, all eyes on the European Central Bank (ECB). The upcoming monetary policy decision will be crucial to understanding the future direction of the Eurozone’s monetary policy. Analysts expect the ECB to opt for a 25 basis point interest rate cut, and every single word from President Christine Lagarde will be carefully analyzed by the markets for any clues about the central bank’s next moves. In addition, The ECB will provide an update on its economic projections, which will provide an overview of the balance of perceived risks and future inflation and economic growth forecasts. This update will be particularly interesting in a context of growing economic uncertainty and slowing growth.
Apple in the spotlight: A highly anticipated event
All the attention on one of the most important corporate events of the year. Today the Cupertino giant will hold its dedicated event to the iPhone, during which the new iPhone models are expected to be presentedApple Watch and AirPods. This event has always been a key moment for Apple, both in terms of sales and future strategy. Investors will be watching these new launches very carefully, considering that iPhone sales represent about 46% of the company’s overall revenue.
After a period of slowdown in sales, the market is hoping that the new models can trigger a significant recovery, with a growth of +2% already observed in product sales in the recent period. But it is not only the hardware that is holding one’s breath. Investors’ real attention will be on Apple’s possible entry into the world of artificial intelligence (AI).). After the disappointment of the Vision Pro headset, which did not meet many expectations, the market is trying to understand whether the company will be able to close the gap with its main competitors in AI. Investors want to know if Apple has a clear strategy for AI and how it intends to integrate it into its future products. An announcement to this effect could strengthen confidence in the stock, and help consolidate the company’s position as a technology leader even in a field, AI, that is attracting more and more investment and attention.
It is worth remembering that Apple is currently the company with the highest market capitalization in the world, exceeding $3 trillion, with a gap of approximately $371 billion over the second-placed company, Microsoft. This event could prove crucial to maintaining Apple’s leadership position in the global technology market, not only with its new devices, but also with the evolution of its strategy in artificial intelligence. The eyes of the world are on the “bitten Apple”, and the answers it will give on this occasion will determine the next moves of investors.
*Italian Market Analyst at eToro
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