By The benchmark S&P 500 and Nasdaq hovered near two-week lows on Wednesday as investors factored in escalating geopolitical tensions in the Middle East, while a survey eased concerns about a sharp slowdown in the US labor market. The Dow Jones Industrial Average also slipped for the second day running.
Apple, Microsoft slide the second day in a row
Technology giants Apple and Microsoft continued their fall on Wednesday as financial markets fear that Israel may soon retaliate against Iran.
On Tuesday, Iran attacked Israel in response to the latter’s killing of a prominent Hezbollah leader last week. This sparked a sell-off in financial markets.
At the time of writing, Apple’s shares were down 0.6% from the previous close, while Microsoft shed 0.7%.
Shares of Uber Technologies and International Business Machines Corporation were among the other big names to fall on Wednesday.
Tesla, Nike lose big
Shares of Tesla, a US-based multinational automotive and clean energy company, tumbled more than 5% on Wednesday.
Tesla’s stock fell sharply, following the release of its third-quarter delivery figures on Wednesday.
According to CNBC, Tesla delivered 462,890 vehicles in the quarter ended September 30, and total production hit 469,796. Analysts polled by FactSet had expected 463,310 deliveries for the period.
Additionally, Nike’s shares fell more than 7% after the company announced its first-quarter revenue, which missed the market’s estimates. It also withdrew its outlook for the year amid a change of Chief Executive Officer.
US private sector adds more jobs
New data from ADP released on Wednesday showed that the US private sector added more jobs than expected in September.
The data showed a total of 143,000 jobs were added last month, which was above analysts’ expectations of 125,000, and significantly higher than August’s figure of 99,000.
The robust data could mean the US labor market continues to be resilient and strong. The US Federal Reserve, which cut interest rates last month by 50 basis points, could hold off on further interest rate cuts of such magnitude due to strong economic data.
Federal Reserve Chair Jerome Powell on Monday said the central bank was in no hurry to cut interest rates.
More economic data is scheduled to be released from the US later this week. On Thursday, the unemployment claims report for the previous week will be released, while the rate of unemployment will be out on Friday.
Investors will be assessing these data points during the next two days for further cues about the US Fed’s next move.
Oil prices and energy stocks continue to rise
Oil prices continue to rise on Wednesday as traders fear that tensions in the Middle East are likely to increase further in the coming weeks.
After Iran attacked Israel late Tuesday, traders are concerned that the US and Israel are set to retaliate against Tehran. If this happens, it could put about 4% of the world’s oil supply at risk.
At the time of writing, Brent crude oil prices were $75,36 per barrel, up 2.5%, while West Texas Intermediate crude was $71.69 per barrel, up 2.6% from the previous close.
CNBC quoted Ryan Detrick, chief market strategist at Carson Group, in a report:
The big worry now is should this conflict spiral into a larger scale war in the entire region, which of course could be a major October surprise.
The Energy Select Sector SPDR Fund (XLE) rose about 0.8%, putting the fund on track for its fourth straight winning day.
Among other energy stocks, Exxon Mobil Corporation rose 1.1%, while shares of Chevron Corporation were up 0.7% from the previous close.
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