Martin Gamble on US markets: Apple unveils foldable iPhone, ups prices

US stock markets sold off sharply this week after oil prices broke through $100 per barrel on renewed hostilities in the Middle East, and bond yields continued to rise on concerns of sticky inflation, with 10-year yields just shy of 5%.

August producer price inflation rose to a hotter than expected 5.4% year-on-year, although core PPI, excluding food and energy increased 4.6%, in line with economists’ forecasts.

Market implied odds of a rate hike from the US Federal Reserve at its next meeting on 16 September increased to 70% from 61% before the PPI data release.

Chip makers Intel and AMD were among the biggest risers in the S&P 500 after analysts at Citi raised their estimate for the CPU (central processing unit) market to reach $237 billion by 2030 from $29 billion in 2025.

Athletic wear maker Lululemon fell by around a fifth after the company missed analysts' earnings estimates and slashed full year forecasts.

BNP Paribas Equity Research senior analyst Laurent Vasilescu said: “We could see multi-quarter and even multi-year declines as the consumer moves away from leggings.”

Apple releases Duo, raises iPhone prices

In the biggest redesign in years Apple revealed its first foldable phone which allows users to keep two apps open at the same time. The Duo opens into a 7.6-inch display and features a 5.4-inch screen.

Apple said the Duo is its thinnest ever phone with prices starting at $1,999 for the 256-gigabyte memory version, which is around $100 more expensive than Samsung’s Galaxy ZFold8 and Google's Pixel 11-Fold Pro.

Traditionally Apple discounts older models but due to the unprecedented global shortage of memory chips, which has pushed up component prices, Apple has bumped up its existing model line up by $100 apiece.

Earlier in the summer Apple quietly put through 20% to 25% price hikes across its MacBook and iPad lines after warning about rising memory chip prices.

Heading into Apple’s ‘Surprise and Shine’ event analysts were anticipating flagship iPhone price rises of between $200 and $300.

Bloomberg’s Mark Gurman and JPMorgan’s analyst Samik Chatterjee note that Apple is absorbing a portion of its surging input costs to protect holiday sales volumes.

By entering the ‘ultra luxury’ segment with the Duo, Apple will be hoping its higher price will increase the desirability and perceived status of the iPhone.

Oracle beats estimates

Enterprise software provider Oracle topped analysts’ earnings estimates driven by strong demand for cloud infrastructure where revenue growth accelerated for the nineth consecutive quarter.

The company projected second quarter adjusted earnings per share in a range of $1.85 to $1.93 which was in line with analysts' forecasts of $1.89. For the full year to May 2027 Oracle guided for adjusted EPS of at least $8.1 compared with consensus estimates of $8.07.

Oracle booked more than $30 billion of additional AI cloud contracts in the first quarter, increasing its RPO (remaining performance obligations) to $664 billion. This represents contracts customers have committed to paying for but the company has not yet recognised as revenue.

Despite generating record operating cash flow of $23 billion in the quarter, capital expenditures jumped to $28.5 billion from $8.5 billion a year earlier, which means the business continued to burn through cash.

Oracle shares bounced around 7% in after-hours trading but remain down by around a fifth so far this year compared with an 11% gain in the S&P 500.

Adobe hit by soft revenue guidance

Photoshop creator Adobe delivered better than expected third-quarter earnings driven by growing demand for its AI-integrated tools, but soft revenue guidance saw investors nursing further losses in after-hours trading.

The shares have lost nearly a third of their value this year on worries over slowing revenue growth with investors wanting to see proof that Adobe can convert its large free tier of AI-users into paid subscribers.

Adobe said it reached a milestone of more than one billion active users.

Jefferies analysts commented: “Results were uneventful with a small revenue beat & raise and unchanged operating margin views.”

Chair and CEO Shantanu Narayen announced that Anil Chakravarthy, currently president of Customer Experience Orchestration, will become Adobe's next president and CEO from 1 December 2026.