US stocks were mixed on Wednesday as escalating Israel-Iran tensions fanned worries about a wider Middle East conflict, prompting caution in the market.
The S&P 500 (^GSPC) Dow Jones Industrial Average (^DJI) and Nasdaq Composite (^IXIC) were all just below the flat line as investors braced for Israel’s promised retaliation for a massive missile attack by Iran.
Stocks have kicked off October under pressure as geopolitical concerns grip the market, dispelling the upbeat mood around hopes for US interest rate cuts. At the same time, oil has extended a surge that saw prices spike over 5% on Tuesday, the most in almost a year.
Brent crude (BZ=F) and West Texas Intermediate (CL=F) futures were both up around 3% on Wednesday, with traders paying a premium amid the prospect of risks to supply from heightened Israel-Iran attacks.
In focus are the chances the run-up in oil prices could push up US inflation, disrupting the progress made by the Federal Reserve. At the same time, Mideast tensions and the US port strike risk hampering supply chains, spurring concerns about the US economy — just when investors were becoming confident in a “soft landing.”
The latest data from ADP out Wednesday showed the private sector added 143,000 jobs in September, above economists’ estimates for 125,000 and significantly higher than the 99,000 seen in August. The release follows mixed data around job openings and comes ahead of the crucial September jobs report on Friday as investors mull the Fed’s interest-rate-cutting path.
Meanwhile, Nike (NKE) shares slid 7% after the sport shoe giant withdrew its outlook for the year, having fallen short on first quarter revenue. “We have yet to turn the corner,” its CFO told analysts on a conference call.
Nike stock tumbles as company withdraws guidance amid CEO change
Nike stock (NKE) sank about 7% on Wednesday after the company reported fiscal first quarter revenue that missed estimates and withdrew its outlook for the year amid a CEO transition.
The shoe giant reported first quarter earnings per share of $0.70, higher than Wall Street’s estimate of $0.52 and down 26% from the year-earlier period. Meanwhile, Nike’s revenue of $11.59 billion fell short of analyst estimates of $11.65 billion and marked a 10% decline from the year-ago quarter.
Nike saw sales slump in both its direct-to-consumer business and its wholesale division. Nike Direct revenues were $4.7 billion, a 13% fall from the same quarter a year ago.Wholesale revenues were $6.4 billion, down 8% on the year-earlier period.
“A comeback at this scale takes time, and while there are some early wins, we have yet to turn the corner,” Nike CFO Matthew Friend said on the company’s earnings call Tuesday night.
Tesla (TSLA) stock slid more than 5% on Wednesday morning as the company announced third quarter deliveries that fell short of Wall Street’s expectations.
The electric vehicle maker delivered 462,890 vehicles in the three months leading up to Sept. 30, up 6.4% from the preceding quarter. This fell short of Wall Street’s expectations of 463,897 vehicles delivered.
Stocks continue to slide at the open, as oil keeps rising
US stocks slipped further on Wednesday as escalating Israel-Iran tensions fanned worries about a wider Middle East conflict, prompting caution in the market.
The S&P 500 (^GSPC) fell about 0.3%, while the Dow Jones Industrial Average (^DJI) slid about 0.2%, as investors braced for Israel’s promised retaliation for a massive missile attack by Iran. The Nasdaq Composite (^IXIC) was also about 0.2% lower.
The tensions have prompted a spike in oil prices. Brent crude (BZ=F) and West Texas Intermediate (CL=F) futures were both up around 3% on Wednesday, with traders paying a premium amid the prospect of risks to supply from heightened Israel-Iran attacks.
Private sector adds more jobs than expected in September
New data from ADP released on Wednesday showed the private sector added more jobs than expected in September. ADP chief economist Nela Richardson described it as a “pretty healthy and widespread rebound” in hiring.