Overnight – Stocks bounce slightly after last week’s savage sell-off

US stocks predictably (and lethargically) rebounded from its biggest weekly slump since 2023, as investors digested Apple’s new line up of AI-enhanced iPhones and looked ahead to inflation data this week.   

Inflation data including the consumer price index and producer price index for August are slated to be released on Wednesday and Thursday, respectively. The duo of inflation update is the last top-tier economic data ahead of the Fed meeting on Sept. 18. Some analysts see the risk of an upside surprise in the core CPI for August, particularly, if hospital prices bounce back.  

While Inflation has been main economic data focus for the last 18 months, the labour market is now in the monetary policy driving seat, and following last week’s weaker nonfarm payrolls report, many expect the Fed to cut at its meeting next week.  

Investors’ are still betting that the Fed will bring down rates by 25-basis points stood at 73% on Monday morning, according to the CME Group’s closely-monitored FedWatch Tool. Meanwhile, the probability of a 50-basis point cut stood at 27% after briefly jumping above 50% in the immediate wake of the jobs data.

Apple closed about flat, struggling to join in on the tech rally even as the tech giant unveiled its new iPhone models, and showcased its generative artificial intelligence software, Apple Intelligence. Apple’s iPhone 16 is expected to start at $799, and $899 for 16 plus model. The tech giant also confirmed that Apple Intelligence would launch in October.  Apple also announced its new redesigned Watch Series 10 and Airpods 4. The product event was closely watched for signs that the Apple’s foray into AI can spark a new upgrade cycle for the iPhone.