On Thursday, the US benchmark equity indexes closed mostly lower as markets remained in suspense, anticipating the official jobs report for September. There was significant movement in oil prices, which surged amid escalating geopolitical tensions in the Middle East. The Dow Jones Industrial Average fell by 0.4%, settling at 42,011.6, while the S&P 500 decreased by 0.2% to reach 5,699.9.
The Nasdaq Composite remained relatively unchanged at 17,918.5. Within sectors, consumer discretionary recorded the steepest decline, whereas energy led the gainers. West Texas Intermediate crude oil prices experienced a notable increase of 5.4%, bringing it to $73.88 a barrel. When asked by reporters whether the US would support Israel in striking Iranian oil facilities, President Joe Biden revealed that discussions were ongoing.
"There's nothing going to happen today," he added, attempting to ease concerns regarding the situation. This week, Israel targeted Hezbollah's intelligence headquarters with new airstrikes in southern Beirut, Lebanon, as reported by CNN. Iran, meanwhile, reportedly executed a missile attack on Israel as retaliation for the killing of Hezbollah chief Hassan Nasrallah, along with an Iranian commander in Lebanon.
These developments raised alarms about the potential for Israel to target Iranian oil facilities, as noted in a Thursday report by ING. They warned that such actions could lead to a significant increase in oil prices, dependent on the severity of the attacks. In the fixed income market, the US two-year yield experienced a rise of 6.8 basis points, reaching 3.71%.
Simultaneously, the 10-year rate increased by 6.3 basis points to 3.85%. Data from the Bureau of Labor Statistics, which is set to be released on Friday, is projected to show that the US economy added 150,000 nonfarm jobs in September. This would indicate an acceleration compared to the 142,000 jobs added in August, according to a Bloomberg compilation. Additionally, weekly applications for unemployment insurance in the US surpassed expectations based on government data released Thursday. Recent weeks witnessed a decline in continuing claims, suggesting a "solid increase" for nonfarm payrolls, as indicated by Jefferies in a note. According to Challenger Gray & Christmas, US-based employers cut 72,821 jobs last month, reflecting a 4% decrease from August and a 53% increase from September 2023. Examining the US services sector for September reveals a mixed outlook.
The Institute for Supply Management’s data indicated that activity expanded beyond expectations, while S&P Global ($SPGI) reported a deceleration in growth. In corporate news, Constellation Brands' ($STZ) fiscal second-quarter earnings exceeded market predictions; however, revenue fell short of Wall Street's anticipations, largely due to a $2.25 billion noncash goodwill impairment loss in its wine and spirits segment.
Consequently, the company's shares plummeted by 4.7%, marking the steepest decline on the S&P 500. Tesla ($TSLA) also faced challenges, being listed as one of the worst performers on both the S&P 500 and the Nasdaq, with shares down by 3.4%. Reports indicated that the electric vehicle manufacturer had removed its most affordable Model 3 model from the US order page on its website.
This move signifies that the recent tariffs on Chinese imports pose a "double-edged sword" for automakers in the US, according to Wedbush Securities. In contrast, Vistra's ($VST) shares increased by 5.7%, making it one of the top gainers within the S&P 500, following RBC's elevation of its price target on the stock from $105 to $141 while maintaining an outperform rating. In commodity markets, gold advanced by 0.3%, reaching $2,677 per troy ounce, whereas silver saw an increase of 1.3%, settling at $32.32 per ounce..