ATTENTION, stock market investors! 4 changes take effect from todayhttps://t.co/8sONkpqE3C
— ET NOW (@ETNOWlive) October 1, 2024
The US stock market started the fourth quarter with losses on Tuesday, with all three major indexes recording declines during intraday trading. The tech-heavy Nasdaq Composite led the declines, shedding around 1.5%. The Dow Jones Industrial Average moved about 0.4% lower, while the benchmark S&P 500 finished the day down roughly 0.9%.
Stocks To Watch | 📊 Ready, set, trade! Keep an eye on these stocks as they set the market abuzz #StockMarket pic.twitter.com/R3xqdDVE1r
— ET NOW (@ETNOWlive) October 1, 2024
The market’s downward movement came as investors searched for further clues on the future of the Federal Reserve’s easing cycle after Fed Chair Jerome Powell hinted that the central bank may rapidly cut rates. New jobs and manufacturing data also kicked off the new quarter. Job openings surprisingly increased in August, furthering the narrative that while the labor market is cooling, it’s not rapidly slowing.
Rotation Stations — historically the Dow tends to outperform the S&P 500 during Q4
More charts: https://t.co/Xh5Rhc8c6z pic.twitter.com/M3Qq75X6ae
— Callum Thomas (@Callum_Thomas) September 30, 2024
The data showed there were 8.04 million jobs open at the end of August, an increase from the 7.71 million seen in July. The Institute for Supply Management (ISM) reported that its manufacturing PMI was unchanged at 47.2 last month. A PMI below 50 indicates a contraction in the manufacturing sector.
S&P 500 up 20.8% heading into October could mean we finally see some red, with October lower 7 of 9 times stocks were up 20% or more heading into this spooky month.
This isn't a bad thing though, as Q4 tends to still rally and we'd expect this to play out again in '24. pic.twitter.com/SCOrDsjgmg
— Ryan Detrick, CMT (@RyanDetrick) October 1, 2024
In other news, a potential strike by dockworkers on the East and Gulf coasts threatens to halt the flow of half of the US’s ocean shipping. The large-scale stoppage could cost the economy billions of dollars a day, stoke inflation, and put jobs at risk.
Tech sector’s sharp Tuesday decline
Nike’s stock dropped around 2% lower in after-hours trading on Tuesday despite the company’s first-quarter earnings beating expectations. Nike reported earnings per share of $0.70, surpassing Wall Street’s expectations of $0.52. However, its revenue of $11.59 billion fell short of analyst estimates of $11.65 billion.
Americans quit their jobs at the lowest rate since 2020 in August. Data released Tuesday showed that the quits rate, a sign of confidence among workers, ticked down to 1.9% in August from July’s 2%, marking the slowest pace since June 2020. Super Micro Computer’s stock fell more than 3% on Tuesday after announcing a 10-for-1 stock split on Monday.
The downside move was further compounded by a report from the Wall Street Journal stating that the US Department of Justice is investigating the company for potential accounting violations. Oil prices spiked on Tuesday due to the geopolitical tensions between Iran and Israel, pushing prices to the highest level in nearly a year. West Texas Intermediate rose more than 5% to trade just below $72 per barrel, while Brent climbed roughly 5% to hover firmly above $75 per barrel.
James Reilly, senior markets economist at Capital Economics, stated that “much remains uncertain” in response to Tuesday’s spike in prices. He explained that a major escalation by Iran could risk bringing the US into the conflict, something Tehran would presumably seek to avoid. In sector action, Energy and Utilities led the day’s gains, up about 1.8% and 0.4% respectively, while the technology sector lagged significantly.
