U.S. stocks fell on Thursday as focus tentatively returned to the economy and monthly jobs report. Meanwhile, concerns about the Middle East conflict were swirling in the background.
The S&P 500 (^GSPC) was down 0.3%, and the Dow Jones Industrial Average (^DJI) was down about 0.6%. The Nasdaq Composite Index (^IXIC), which has a high proportion of high-tech stocks, fell 0.3%. All three gauges closed just above the flat line on Wednesday.
Some calm has returned to the market, which had been roiled by escalating tensions in the Middle East that had caused oil prices to soar. Israel has yet to launch its promised retaliation for Tuesday’s Iranian missile attack as Western countries and regional leaders seek to stabilize the situation.
Investors are now bracing for the much-anticipated September jobs report to be released on Friday after an unexpected increase in private payrolls along with signs that the labor market is easing.
On Thursday, there were further signs that the overall labor market is cooling. Weekly unemployment claims rose slightly from the previous week. Meanwhile, planned job cuts in the U.S. have fallen from a five-month high, according to a report from Challenger, Gray and Christmas. But the company’s vice president said the data shows the labor market is at a “tipping point.”
Despite policymakers expecting a 0.25% rate cut in November, new signs of deterioration in the labor market could prompt the Fed to take even larger steps following last month’s 0.5% rate cut.
Read more: How Fed Rate Cuts Affect Bank Accounts, CDs, Loans, and Credit Cards
Meanwhile, oil prices have risen for three consecutive days due to the Israel-Iran crisis, which could also put pressure on economic activity. Brent crude oil futures (BZ=F) and West Texas Intermediate (CL=F) futures both rose over 4% on Thursday following President Biden’s comments about the possibility of Israeli retaliatory attacks on Iranian oil facilities. rose.
On the corporate front, Levi Strauss (LEVI) shares fell about 8% after the jeans giant released disappointing earnings forecasts and said it was considering selling its Dockers brand. Tesla (TSLA) stock continued to fall following lackluster delivery numbers, as Reuters reported that the EV maker had suspended online orders for its cheapest model, the Model 3, in the United States.
Live10 update
Thursday, October 3, 2024 12:15 PM PDT
2024 salaries will trend toward pre-pandemic trends
The September jobs report is scheduled to be released at 8:30 a.m. ET as investors ponder how quickly the labor market is cooling.
Keith Lerner, co-chief investment officer at Trust, shared a chart in a note to clients Wednesday night to help prepare for Friday’s report. Lerner noted that average monthly job growth in 2024 will roughly match the pre-pandemic pace.
He noted that this comparison shows that the labor market is “cooling down, but not yet weak.” This is a sentiment that some economists have also expressed recently.
With 150,000 more jobs expected to be added in September, payroll numbers won’t be the focus of Friday’s report. Perhaps the question will once again be how many people can’t find work. The unemployment rate is expected to remain flat at 4.2%. An unexpected rise could heat up debate about a deep Fed rate cut in November.
Thursday, October 3, 2024 11:59 AM PDT
Average mortgage interest rate up to 6.12%
Yahoo Finance’s Claire Boston reports:
Mortgage rates rose slightly this week, reflecting a rise in benchmark U.S. Treasury yields.
The average interest rate on a 30-year fixed-rate mortgage was 6.12% as of Thursday, up from a two-year low of 6.08% the previous week, according to Freddie Mac data. The average interest rate on 2015 home loans was 5.25%, up from 5.16% at the same time last week.
The rise came as the 10-year U.S. Treasury yield, which is closely linked to mortgage rates, rose as investors assessed the health of the economy and rising tensions in the Middle East.
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Thursday, October 3, 2024 11:17 a.m. (Pacific Daylight Time)
Tesla stock falls more than 4%
Tesla (TSLA) stock fell more than 4% on Thursday, dragging down the consumer staples (XLY) sector.
The EV giant fell to a trading low after Bloomberg reported that employees were told the company’s chief information officer was retiring days before Tesla’s robotaxi was unveiled in California. Nagesh Sardi reported directly to CEO Elon Musk.
On Wednesday, Tesla announced that third-quarter vehicle deliveries were slightly lower than expected.
Thursday, October 3, 2024 10:16 a.m. (Pacific Daylight Time)
Walmart, Target and Nike are among the retailers affected if the port strike continues beyond this week.
Yahoo Finance’s Brooke DiPalma reports:
Retailers are bracing for the potential impact as Eastern and Gulf ports remain closed for the first time in 50 years.
If the port strike continues beyond this week, it could start to impact retailers’ margins, inventory and sales.
“Walmart, Target, Amazon…Costco, the big diversified retailers. They’re the ones with the leverage,” Joe Feldman of Telsey Advisory Group told Yahoo Finance.
Amazon (AMZN) stock fell more than 1% on Thursday as the broader market slumped.
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Thursday, October 3, 2024 9:45 a.m. (Pacific Daylight Time)
Port strike could cost US economy up to $4.5 billion a day and hurt GDP growth: analyst
Yahoo Finance’s Laura Bratton reports:
The ongoing U.S. longshoremen’s strike could cost the economy up to $4.5 billion a day and reduce U.S. GDP by half a percentage point in the fourth quarter, analysts say. There is.
About 45,000 members of the International Longshoremen’s Association went on strike Tuesday, temporarily closing 36 ports from Maine to Texas.
According to data compiled by Jason Miller, a supply chain management professor at Michigan State University, the most affected U.S. imports are construction materials, European wine, and fruit from Latin America, mostly on the East Coast. It is said to be imported via the port.
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Thursday, October 3, 2024 9:00 a.m. (Pacific Daylight Time)
September employment report: Employment growth expected to accelerate as unemployment rate remains flat
Yahoo Finance’s Josh Schafer reports:
September’s jobs report is the latest indication that while the labor market is cooling in 2024, it is not deteriorating rapidly enough to prompt the Federal Reserve to cut interest rates significantly in November. It is expected that this will serve as evidence.
Consensus estimates compiled by Bloomberg show that nonfarm payrolls will increase by 150,000 in September, while the unemployment rate will remain flat at 4.2% in a monthly report scheduled for release Friday at 8:30 a.m. ET. This is expected to be the case.
A key question from Friday’s announcement is whether the data reflects a significant cooling in the labor market, which could prompt the Fed to cut rates even further.
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Thursday, October 3, 2024 08:22 PDT
Energy, utilities and tech stocks rise while other sectors slump
Energy stocks (XLE) outperformed the broader market on Thursday as oil prices soared on concerns about supply disruptions caused by Middle East conflicts.
The S&P 500 Utilities (XLU) sector also rose slightly.
A rally in Nvidia (NVDA) stock kept the tech (XLK) sector above the flatline.
The AI chip giant’s stock rose after CEO Jensen Huang told CNBC that demand for the company’s next-generation Blackwell chips is “insane.” .
Thursday sector action
Thursday, October 3, 2024 7:41 PDT
Oil prices soar nearly 4% on concerns about supply disruptions
Oil prices rose for the third consecutive session on Thursday on concerns about supply disruptions caused by Middle East conflicts.
West Texas Intermediate futures (CL=F) rose more than 4%, while international benchmark Brent futures (BZ=F) rose on expectations that Israel would retaliate against Iran following Tuesday’s ballistic missile attack by Iran. It has risen nearly 4% since then.
Dennis Kistler, SVP of trading at BOK Financial, said in a note Thursday that “futures remain trading nervously” about the possibility that Israel’s response could hit Iran’s oil facilities.
Concerns over the possible blockage of the Strait of Hormuz, a choke point for oil transport, also pushed prices higher.
Thursday, October 3, 2024 7:05 a.m. PDT
Nvidia rises 4%, helping Nasdaq emerge into green territory
Nvidia stock (NVDA) rose more than 4% on Thursday morning, helping lift the Nasdaq Composite Index (^IXIC).
Tech indexes erased early morning losses and moved into green territory as leading AI chip stocks and other semiconductor stocks rose.
Thursday, October 3, 2024, 6:30 a.m. (Pacific Daylight Time)
Stocks open lower as monthly jobs report is released and Middle East tensions rise
Stocks opened lower Thursday as investors focused on the monthly jobs report this week for clues about the health of the economy while keeping an eye on Middle East conflicts.
The S&P 500 (^GSPC) fell 0.3%. The Dow Jones Industrial Average (^DJI) fell 0.3%, and the tech-heavy Nasdaq Composite Index (^IXIC) fell 0.5% after all three averages ended above their flat lines on Wednesday.
Investors are awaiting the release of the long-awaited September jobs report on Friday morning. The weekly number of new jobless claims announced Thursday was up slightly from the previous week.
In commodities, oil prices rose on Thursday as the Israel-Iran crisis heightened concerns about regional supply disruptions. Brent (BZ=F) and West Texas Intermediate (CL=F) each rose more than 2% in early trading.
