US benchmark equity indexes were experiencing a downturn during intraday trading, while oil prices surged after Iran executed a ballistic missile assault on Israel. The Nasdaq Composite Index dropped 1.9%, reaching 17,836.7 by midday on Tuesday, while the S&P 500 fell by 1.2% to settle at 5,694.1. The Dow Jones Industrial Average recorded a decrease of 0.6%, landing at 42,055.4.
Among the various sectors, technology was hit hardest, showing the steepest decline, whereas only the energy and utilities sectors maintained positive performances. This military action by Iran was reported as retaliation for the recent killing of Hezbollah leader Hassan Nasrallah and an Iranian commander in Lebanon, highlighting the escalating tensions in the region.
Consequently, West Texas Intermediate crude oil witnessed a notable surge, increasing by 4.3% to reach $71.11 per barrel during the trading session. In terms of economic indicators, the US manufacturing sector remained under pressure, continuing to exhibit signs of contraction in September due to softening demand and decreasing employment rates, as reported by the Institute for Supply Management and S&P Global ($SPGI).
TD Economics commented on this development, noting, "Combined with the Federal Reserve embarking on its rate-cutting cycle, there are some glimmers of optimism for a sector that has struggled under the weight of higher interest rates." Additionally, US job openings increased notably to 8.04 million in August, up from 7.71 million reported in the previous month, exceeding the consensus expectation of 7.67 million according to a survey compiled by Bloomberg. Meanwhile, the International Longshoremen's Association union initiated a strike along the US East and Gulf Coast ports early Tuesday.
This decision followed their rejection of the United States Maritime Alliance's final contract proposal, leading to port shutdowns from Maine to Texas. On the bond market front, the US two-year yield decreased by 4.1 basis points, settling at 3.61%, while the 10-year yield fell 6.3 basis points to reach 3.74%. In company-specific news, suppliers for Apple ($AAPL) may need to source parts from China or other locations due to a fire that extensively damaged a Tata Group iPhone component manufacturing facility in India over the weekend, according to reports.
As a result, shares of Apple fell by 3.7%, marking one of the steepest declines in both the Dow and Nasdaq. On a positive note, Paychex ($PAYX) emerged as the top performer on the S&P 500 and secured the second-best position on the Nasdaq, rising by 5.2%. This uptrend followed the company's announcement of better-than-anticipated fiscal first-quarter results along with a reaffirmation of both top-line and bottom-line guidance. Companies such as Nike ($NKE), Lamb Weston ($LW), and Cal-Maine Foods ($CALM) are expected to disclose their latest quarterly financial results following the closing bell on Tuesday.
In commodities, gold prices rose by 0.9%, reaching $2,683.70 per troy ounce, while silver prices increased by 0.6% to $31.65 per ounce..