U.S. stocks slipped lower Tuesday, while the dollar regained ground against its global peers and Treasury bond yields moved higher ahead of a 10-year auction later in the session, as markets continue to focus on growth and inflation forecasts heading into tomorrow's key CPI reading.
Tech stocks drove much of yesterday's broader market gains, with Tesla (TSLA) -) rising more than 10% off the back of an AI-linked upgrade from Morgan Stanley that powered the Nasdaq to a 1.14% advance.
Apple (AAPL) -) is likely to be today's market catalyst, however, as the tech giant unveils the latest iteration of its iconic iPhone later today at its 'Wonderlust' launch event in Cupertino.
Investors will also track developments in the bond market, which dictated the pace of trading for much of last week, ahead of a $35 billion sale of 10-year notes expected at around 1:00 pm Eastern time and less than 24 hours ahead of the Commerce's Department's August inflation report.
Analysts expect a mixed reading for August inflation on Wednesday, with the headline consumer price index likely having quickened to 3.6% while the closely watched core reading slowed to around 4.3%.
The readings will add fuel to concern that a tight labor market, rising oil and gas prices and resilient consumer spending could add to autumn inflation pressures and trigger an end-of-year rate increase from the Federal Reserve.
Benchmark 10-year note yields were marked little-changed from Monday levels at 4.292% heading into the session, and the auction results at mid-day, while 2-year notes rose 2 basis points to 5.014%
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.25% higher at 104.830 in early New York trading.
The dollar's recent advances, which took it to a six month high in early September, could reflect renewed demand for U.S. stocks, as evidenced in the monthly fund managers' survey published by Bank of America.
BofA noted a record rotation out of emerging market stocks into U.S. equities from its survey, creating the first 'overweight' to domestic stocks since August of last year.
Heading in to the middle of the trading day on Wall Street, the S&P 500 was marked 17 points, or 0.37% lower while the Dow Jones Industrial Average slipped 58 points. suggest a 65 point pullback. The Nasdaq was down 73 points.
In overseas markets, Britain's FTSE 100 gain 0.45% by late-day in London following a higher-than-expected reading for second quarter unemployment, which was pegged at 4.3%, suggesting next week's Bank of England rate hike could be the last of its tightening cycle.
The region-side Stoxx 600, meanwhile. was marked 0.11% lower in late Frankfurt heading into the European Central Bank's policy meeting Thursday
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