Nasdaq leads stock declines after mixed labor and economic data, Iran oil spikes report

U.S. stocks fell deeper on Tuesday as investors assessed a series of new economic data. Meanwhile, reports that Iran is preparing a possible missile attack on Israel sent bond yields lower and crude oil prices higher (CL=F).

The Dow Jones Industrial Average (^DJI) fell about 0.5% while the S&P 500 (^GSPC) fell about 1% after both major indexes hit new record highs last quarter. The tech-heavy Nasdaq Composite (^IXIC) extended losses in early trading, falling around 1.7%.

New jobs and manufacturing data opened the new quarter as investors looked for further clues about the future of the Federal Reserve's easing cycle after Fed Chair Jerome Powell suggested the central bank was in no hurry to cut interest rates quickly.

The number of job vacancies unexpectedly increased in August, reinforcing the idea that the labor market is cooling, but not slowing down rapidly. New data showed there were 8.04 million job vacancies at the end of August, up from 7.71 million in July.

Meanwhile, US production remained stable in September. The Institute for Supply Management (ISM) said its manufacturing PMI was unchanged at 47.2 last month. Although the reading remained stable, it was still weak as a PMI below 50 indicates a decline in the manufacturing sector.

Read more: What the Fed's interest rate cut means for bank accounts, CDs, loans and credit cards

The data prepares investors for Friday's September jobs report, the highlight of a week of closely watched economic data. Investors are waiting for confirmation that the U.S. economy is cooling rather than collapsing.

Meanwhile, a longshoremen's strike began on the East and Gulf Coasts, threatening to halt the flow of half of U.S. shipping. Disruptions from the widespread shutdown could cost the economy billions of dollars each day, fuel inflation, threaten jobs and reverberate in U.S. politics.

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Tuesday, October 1, 2024, 4:51 p.m. GMT+2

Oil prices rise due to headlines about the missile attack in Iran

Oil prices rose after news emerged Tuesday morning that Iran was preparing a missile attack on Israel.

West Texas Intermediate (CL=F) rose about 3% and traded above $70 a barrel. Brent (BZ=F), the international benchmark price, also rose about 2% to just under $74 a barrel.

“The United States has indications that Iran is preparing to launch an imminent ballistic missile attack against Israel,” a senior White House official said in a statement quoted by multiple media outlets. “We are actively supporting defense preparations to defend Israel against this attack. A direct military attack by Iran against Israel will have serious consequences for Iran.”

Tensions in the Middle East have escalated in recent days after Israel launched ground attacks against the Iran-backed militant group Hezbollah in southern Lebanon.

The possible missile attack, as well as mixed employment and economic data released on Tuesday, led stocks to move lower, with the tech-heavy Nasdaq leading the declines.
Tuesday, October 1, 2024 at 4:04 p.m. GMT+2

In August, job vacancies increase and the number of layoffs decreases

The number of job vacancies unexpectedly increased in August, reinforcing the idea that the labor market is cooling, but not slowing down rapidly.

New data from the Bureau of Labor Statistics released Tuesday showed there were 8.04 million job openings at the end of August, an increase from July's 7.71 million. Economists polled by Bloomberg had expected the report to show a slight increase in job vacancies to 7.67 million in August.

The July figure was revised upward from the 7.67 million job vacancies originally reported.

The Job Openings and Labor Turnover Survey (JOLTS) also found that 5.31 million new hires were made during the month, compared to 5.41 million in July. The hiring rate reached 3.3% in August, compared to 3.4% in July. Also in Tuesday's report, it said the churn rate, a sign of worker confidence, fell to 1.9%, the lowest level since June 2020.
Tuesday, October 1, 2024, 3:34 p.m. GMT+2

Inventories are slowing the start of October

U.S. stocks opened lower on Tuesday to begin the first trading day of October and the fourth quarter.

The Dow Jones Industrial Average (^DJI) fell about 0.4% while the S&P 500 (^GSPC) fell about 0.3% after both major indexes posted new record closes on Monday. The tech-heavy Nasdaq Composite (^IXIC) also moved lower, losing around 0.3%.
Tuesday, October 1, 2024, 3:19 p.m. GMT+2

Stellantis shares continue to fall on Jeep fire threat

Jeep maker Stellantis (STLA) fell slightly 1 percent in premarket trading on Tuesday after announcing a recall of over 150,000 hybrid Jeep SUVs due to “potential fire hazards.”

The drop in Stellantis shares came just a day after the stock plunged 12.5% in response to the automaker's gloomy outlook for its North American operations. Stellantis – which also makes Dodge and Ram cars – said it expected a full-year profit margin of 5.5% to 7%, up from its previous double-digit forecast. To weather worsening conditions in the global auto industry, the automaker has planned cost-cutting measures and discounts, Yahoo Finance reporter Pras Subramanian explained on Market Domination.

Meanwhile, the newly issued recall affects the 2020-2024 Jeep Wrangler 4xe and 2022-2024 Jeep Cherokee 4xe SUVs. The company said an internal investigation found 13 fires related to the problem. However, it is estimated that only 5% of recalled vehicles are at risk of fire.
Tuesday, October 1, 2024, 2:47 p.m. GMT+2

Barclays doesn't compromise with Apple

Barclays analyst Tim Long blasted Apple (AAPL) in a new note this morning, pointing to weak demand for the iPhone 16.

Here's what Long had to say:

“In early July, a few weeks after the launch of Apple Intelligence, there was a lot of news about increased iPhone production. Based on our recent reviews of supply chain channels, we believe AAPL just cut approximately 3 million units of a key semiconductor component in iPhones for the December quarter, which, if confirmed, would be the earliest production cut in recent history. Our sell-through checks indicate a 15% year-over-year decline for iPhone 16 worldwide in the first week of sales across regions worldwide, indicating lower demand for IP16 compared to last year. The waiting times in the main regions we covered were significantly shorter compared to last year. Supply chain constraints on IP15 Pro models have led to potentially weaker demand last year – than expected demand, particularly in the US and China. All of the above data points point to weaker demand than previously expected.

Long reiterated its underweight position on Apple (sales equivalent).