Closing Bell: Stocks Modestly Lower on Tech Weakness, Iran-Hormuz Stalemate

With doubts about the U.S. and Iran negotiating to open the Strait of Hormuz to oil tanker traffic, markets moved lower Tuesday.

The Dow Jones Industrial Average ($DJI) declined 0.34% and the S&P 500 (SPX) slipped 0.32%. The tech-heavy Nasdaq-100 (NDX) fell 0.33%. The small cap Russell 2000 Index rose 0.32%. The U.S. benchmark price for crude oil rose more than 1.3% to $83.23 per barrel.

Among S&P sectors, Utilities, Energy and Industrials were in the green. But the majority of sectors were in the red, led by the Communication Services, Real Estate, and Consumer Discretionary names. 

Four things to watch from Tuesday's markets:

Iran: Negotiation Stalemate?

Oil prices rose amid uncertainty over the Middle East conflict, which is focused on the outcomes of the U.S.-Iran war and the major transportation stall on critical waterways surrounding Iran, Saudi Arabia, and their neighbors. Pakistan Defense Minister Khawaja Asif said that “things are shaping up again in favor of a peace arrangement or a deal.” Iran and Oman have discussed reopening the Strait of Hormuz to some traffic, freeing up energy shipments. However, the new secretary of Iran’s Supreme National Security Council said the Strait would not reopen until the U.S. accepts its conditions, according to reports. See Strait of Hormuz Headlines Clash as NVDA Rallies & INTC Raises Stock Offering

Nvidia (NVDA) Shares Give Up Gains

Nvidia stock gave up gains and finished flat at $217.87 Tuesday after the chipmaker said late Monday that it has lined up $500 billion in capital and financing for customers through six large Wall Street firms. Its goal is to ease bottlenecks in the AI ecosystem, especially for those companies that are small and rely on Nvdia chips, according to reports. Morgan Stanley maintained its Overweight rating on the stock and its $288 price target, saying of the funding mobilization that the positives "significantly outweigh the negatives." The Information said that Nvidia is reportedly developing a new Nemotron 4 open-source AI model. See NVDA Makes $500B AI Infrastructure Push, CRWD & PANW Tap All-Time Highs

Apple Redesign Happening? 

Apple (AAPL) is still planning a glass-centric redesign for the iPhone 20th anniversary in 2027, according to Bloomberg. Jefferies downgraded the stock Monday, citing the possibility that Apple will cancel its all-glass iPhone, as well as supply chain issues, and memory costs. On Tuesday, Loop Capital adjusted its price target to $340 from $350 but maintained its Buy rating. Apple shares were down 1% to $304.91 Tuesday, bringing their two-day decline to –2.7%. See Example Trades: AAPL, ONON, RKLB | Fast Market

U.S. Home Sales Drop

Existing home sales fell 1.7% in July compared to June, to a seasonally adjusted annual rate of 4.06 million units, the National Association of Realtors said. Rising mortgage rates, high house prices, and other factors are impacting buyer activity; economists expected a smaller decline, according to reports. July sales were up 0.7% compared with last year. There are other costs impacting consumer wallets. See Why Americans are Focusing More on Retirement as Spending Pullback Woes Heighten

Angrej Singh and Tom White contributed to this article.

ECONOMIC DATA (ET), Wednesday, Aug. 12

·        07:00 AM – MBA Mortgage Applications

·        08:30 AM – Consumer Price Index (CPI)

EARNINGS SNAPSHOT:

Wednesday:

·        Premarket: Nebius Group (NBIS), Amcor (AMCR), Brinker International (EAT)

·        Postmarket: Cisco Systems (CSCO), Cerebras Systems (CBRS)

Thursday:

·        Premarket: JD.com (JD), Tapestry (TPR), Birkenstock (BIRK), YETI (YETI), Bullish (BLSH), Intuitive Machines (LUNR)

·        Postmarket: Applied Materials (AMAT)

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