Market Overview

The Wall Street sentiment made a sharp turn in the second half of the week. A sudden slump of Apple shares dragged down the S&P 500 back to test the strength of its major technical support area closer to 4,400-4,425. 

The iPhone maker lost more than 7.5% of its market value during two trading sessions on September 6-7, which varied greatly and did not conform to previously positive moves ahead of its annual “Wonderlust" event which is scheduled for next Tuesday. Apple stocks traded at nearly $190 per share last Friday slid below $175 before. 

Newswires reported that Beijing officials decided to expand their ban to state-owned firms and government agencies on using foreign gadgets to Apple production. China's government noted it was ramping up efforts to limit its dependence on foreign technologies and referring to national security priorities. This might be a source of worries about potential damage on future demand, as China is definitely a big market for the IPhone-maker.

That was a gut-punch, which has partially demotivated investors from picking up other tech stocks despite moderately discounted prices. How fast can the bulls recover, partially or completely after the hit may depend mostly on nearest inflation developments and corporate background.

Surprisingly higher than feared activity in the U.S. service sector (54.5 points vs 52.7 a month ago), combined with an increase of its prices paid component to 58.9 from 56.8, added to the Federal Reserve's (Fed) conception of stubborn inflationary pressures. This raised the bets for a possible rate hike in November or December to nearly 50% from 38% earlier in the week. This was another negative factor for the S&P 500. 

As to Apple's upcoming presentation on September 12, it could be interpreted from a different angle now. Unveiling the much-anticipated iPhone 15 line-up and new Apple Watch Series 9 and Ultra 2 are good news, which may boost sales globally, as many consumers didn't order the previous models expecting up-to-date gadgets. Media is speculating about new USB-C ports to replace signature lightning ports to offer faster data transmission and charging speeds. Yet, if there would be the lack of news about breakthrough garnitures of augmented reality or other next generation technologies, some part of the crowd may not musk its frustration, so that the resulting market sentiment may be suspended in the air for a couple of days at least.

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