Markets News, October 1, 2024: Stocks Close Lower as Big Tech Tumbles; Oil Rises on Middle East Tensions
· InvestopediaMajor indexes closed lower Tuesday, retreating from recent record highs as technology stocks tumbled, while crude oil prices jumped on concerns about escalating tensions in the Middle East.
The Dow Jones Industrial Average fell 0.4%, while the S&P 500 and Nasdaq Composite dropped 0.9% and 1.5%, respectively. The major indexes were coming off gains on Monday, when the Dow and S&P 500 hit record closing highs to cap off a strong month and quarter. The S&P 500 gained 21% over the first three quarters of the year, its best start to a year so far this century.
Large-cap tech stocks, which have underpinned the broader market's gains this year, led the move lower on Tuesday. AI investor favorite Nvidia (NVDA) closed 3.7% lower, while Apple (AAPL) fell 2.9% amid concerns about soft iPhone 16 demand. Microsoft (MSFT) and Amazon (AMZN) also lost ground, while Meta Platforms (META) and Alphabet (GOOGL) both gained less than 1%. The VanEck Semiconductor ETF (SMH) fell 2.7% as Intel (INTC), Broadcom (AVGO), Micron (MU) and other chip stocks fell sharply.
Crude oil futures jumped as much as 5% as reports came in that Iran fired missiles into Israel in the latest escalation of conflict in the Middle East. Those gains moderated to around 3.5% in late-afternoon trading.
Shares of energy and oilfield services companies moved higher in tandem with the rise in oil prices, with Marathon Oil (MRO), ConocoPhillips (COP), Occidental Petroeum (OXY) and Halliburton (HAL) all solidly higher. Defense contractors, including Northrop Grumman (NOC) and Lockheed Martin (LMT), also gained ground amid the rising Middle East tensions.
The decline Tuesday marked the third straight time that stocks have fallen sharply at the start of the month, and market participants will be hoping that the rest of the month plays out like the last two.
U.S. stocks have rallied in recent weeks, recovering from their early-September swoon, as investors have grown confident that the economy is headed for a soft landing and the Federal Reserve will continue cutting its benchmark interest rate, after doing so last month for the first time in four years. While Fed officials have made clear that the easing will continue, Fed Chair Jerome Powell said Monday that the Fed's policy committee isn't in a hurry to cut rates, noting that incoming data will guide decision-making.
The economic data calendar is busy the remainder of the week, with the big event coming Friday when the September jobs report will be released. Market participants will be keeping close tabs on the economic releases, as well as several scheduled appearances from Fed officials this week.
Investors are also keeping an eye on the massive strike by dockworkers in the U.S. that started overnight, affecting shipments at 14 ports stretching from Maine to Texas and potentially having a big negative impact on the economy.
Gold futures were up nearly 1% at around $2,690 an ounce, nearing a fresh record high, while bitcoin fell to around $62,000 and was trading near a two-week low.
Biggest S&P 500 Movers on Tuesday
5 hr 16 min ago
Decliners
- Amentum Holdings (AMTM) shares plunged 20%, reversing similarly sized gains posted in the previous session as the government services firm debuted as a publicly traded company and became the newest member of the S&P 500. The company brings together an existing engineering and technology provider with two government-related divisions spun off from Jacobs Solutions (J).
- Shares of Humana (HUM) dropped 12% after the health insurer announced its Medicare Advantage and Medicare Prescription Drug Plan offerings for 2025. The company announced new benefits including a new pair of glasses every year for all plans with vision coverage and plans with comprehensive dental coverage. Although Humana has seen some improvement in its Medicare business, challenges related to Medicare reimbursement rates contributed to the firm's decision to withdraw its full-year profit guidance in April.
- According to regulatory filings, Dell Technologies (DELL) founder and CEO Michael Dell sold a $1.2 billion stake in the tech hardware and services provider. Significant selling by company insiders can cause investors to become less optimistic about a stock's expected trajectory, and Dell shares sank 4.5% on Tuesday. Dell is another recent addition to the S&P 500.
Advancers
- Tuesday's top performance in the S&P 500 belonged to shares of Paychex (PAYX), which jumped 4.9% after the payroll services provider reported better-than-expected sales and profits for its fiscal first quarter. The firm said expansion of its client base, strong cost controls, and new artificial intelligence (AI) products contributed to the strong results.
- Crude oil futures prices jumped as growing tensions in the Middle East raised concerns about global energy supplies. The uptick in prices provided a boost to numerous oil and gas stocks. Shares of APA Corp. (APA) added 4.9%, while shares of ConocoPhillips (COP) and Marathon Oil (MRO) were up 3.9% and 3.8%, respectively.
- The rising geopolitical concerns also helped lift defense and weapons stocks. Lockheed Martin (LMT) shares added 3.6%, while shares of other companies in the defense industry also advanced.
Crude Oil Jumps as Middle East Conflict Escalates
7 hr 56 min ago
Crude oil gained as much as 5% as reports of Iranian missiles targeted at Israel came in Tuesday, in an escalation of tensions in the Middle East.
Brent crude futures briefly crossed $75 per barrel while the U.S. benchmark, West Texas Intermediate Texas (WTI), traded just below $72 per barrel as oil supply disruptions concerns rose. Iran is a member of OPEC—a trade bloc of oil producing nations—and was the world's ninth-largest oil producer in 2023.
Israel said Iran launched missiles towards it, in what is being construed as a direct attack. "A short while ago, missiles were launched from Iran towards the State of Israel,” the Israel Defense Forces said in a statement.
Tensions in the middle east have been rising over the past few days after Israel launched strikes against Iran-backed Hezbollah leaders in Lebanon, likely prompting today's action.
"The deeper the conflict intensifies, oil could indeed surge higher as risk rises that the military response veers into the oil producing area around Iran," said LPL Financial Chief Global Strategist Quincy Krosby in a commentary.
The gains for both Brent and WTI moderated to about 3% in late-afternoon U.S. trading. Despite the sharp increases Tuesday, Brent is still about 20% below its high for the year of more than $90 a barrel.
Apple Tumbles as Barclays Warns of 'Softer' iPhone 16 Demand
9 hr 11 min ago
What a difference a day makes for Apple (AAPL).
Its shares neared record territory Monday after JPMorgan analysts gave a relatively upbeat assessment of demand for the Pro versions of the iPhone 16.
The shares reversed direction today, falling alongside broader markets as Barclays analysts reported weakening demand for the phone.
Apple's stock was recently down about 3.4%, well ahead of the tech-focused Nasdaq's 1.4% decline in recent afternoon trading.
Barclays said it has indications that orders for the December quarter have been reduced at an important Taiwanese iPhone component supplier. Analysts Tim Long and George Wang wrote in a note to clients that Apple “may just have cut roughly 3 million units at a key semiconductor component in iPhones for the [December quarter], which if confirmed would be the earliest build cut in recent history.”
The analysts added that they previously have noted shorter lead times across iPhone models globally, and that both of those factors “indicate softer demand for IP16, in our view.”
U.S.-Traded Chinese Stocks Rise as Stimulus Rally Continues
10 hr 28 min ago
Shares of Chinese companies traded in the U.S. surged again Tuesday, bucking a broader retreat for the U.S. stock market.
Chinese stocks have rallied for the past week following news that authorities were implementing a wide-ranging stimulus plan.
The Nasdaq Golden Dragon China index (HXC)—an index of 64 China-based companies traded in the U.S—was up more than 3% in early-afternoon trading Tuesday.
The iShares MSCI China ETF (MCHI) was up 2.5% and has gained 21% since the first batch of stimulus measures were unveiled early last Tuesday.
Among Chinese stock gaining today, PDD Holdings (PDD), parent of online marketplace Temu, was up nearly 5%, leading S&P 500 gainers. Shares of online retailer JD.com (JD) were also up about 5%, while conglomerate Alibaba Group Holding (BABA) gained 4% and Li Auto (LI) rose 8%.
Five Stocks to Watch in October
12 hr 11 min ago
The major indexes entered the fourth quarter near record highs after the Fed's rate cut fueled a rebound from a shaky start to September.
Looking ahead at specific companies, October brings a major product launch from one of the Magnificent Seven and earnings reports from key companies in the tech, banking, and apparel industries.
Five stocks worth watching for potential market-moving news are Tesla (TSLA), Microsoft (MSFT), Intel (INTC), JPMorgan Chase (JPM) and Nike (NKE).
Read the full article here.
How the Major Indexes Performed in September and Q3
14 hr 2 min ago
The Nasdaq Composite was the big gainer among the three major indexes in September, rising 2.7%. Each of the indexes recovered from steep selloffs recorded during the first week of the month. The S&P and Dow are riding five-month winning streaks, while the Nasdaq has posted gains in two straight months.
For the third quarter, the Dow Jones Industrial Average turned in the best performance, rising 8.2%.
Major Stock Index Futures Mixed
14 hr 51 min ago
Futures tied to the Dow Jones Industrial Average were down 0.2%.
S&P 500 futures were down fractionally.
Nasdaq 100 futures were up 0.1%.