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US STOCKS-Wall St set to open lower after Middle East tensions make investors jittery
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US STOCKS-Wall St set to open lower after Middle East tensions make investors jittery
Oct 2, 2024 11:02 PM

(For a Reuters live blog on U.S., UK and European stock

markets, click or type LIVE/ in a news window.)

*

ADP survey: US adds 143,000 private jobs in September

*

Nike ( NKE ) falls after withdrawing annual revenue forecast

*

Humana drops on fewer members in Medicare Advantage plans

*

Futures off: Dow 0.21%, S&P 500 0.23%, Nasdaq 0.12%

(Updated at 08:24 a.m. ET/1224 GMT)

By Johann M Cherian and Purvi Agarwal

Oct 2 (Reuters) -

Wall Street was poised for a slightly lower open on

Wednesday after geopolitical tensions in the Middle East and a

domestic port strike left investors nervous, while a survey

allayed concerns about a rapid cooldown in the labor market.

In a dour start to the final quarter of the year, the

S&P 500 and the Nasdaq logged their biggest

one-day drops in nearly a month on Wednesday, after Iran fired

missiles against Israel in retaliation for its attacks in

Lebanon.

Markets held their ground since, after Israel and the U.S.

vowed to strike back, with oil prices climbing more than 3% as

traders priced in possible supply disruptions from the oil-rich

region. SLB and Occidental Petroleum ( OXY ) added 1.7%

and 1.6%, respectively, in premarket trading.

Defense stocks such as Lockheed Martin ( LMT ) and RTX

gained 0.7% and 1%, respectively, after the broader S&P

500 aerospace and defense index hit a record high

in the previous session.

"Sentiment is dominated by the risk of escalating

conflict in the Middle East and there is a lack of information

on how strong the response is going to be from the Israelis,"

said Jay Hatfield, portfolio manager at InfraCap.

Meanwhile, the ADP National Employment report showed the

economy added 143,000 private jobs in September, compared with

estimates of 120,000, according to economists Reuters polled.

Odds of a quarter-percentage-point rate reduction at the

Fed's November meeting are at 64.2%, up from 42.6% a week ago,

according to the CME Group's FedWatch Tool.

"The ADP report was strong and that might be mitigating

the volatility, because we're not in a complete information

vacuum," Hatfield said.

Dow E-minis were down 89 points, or 0.21%, S&P

500 E-minis were down 13 points, or 0.23% and Nasdaq 100

E-minis were down 24.25 points, or 0.12%.

Futures tracking the small-cap Russell 2000 index

slipped 0.7%, while safe-haven Treasury bonds dipped after

Tuesday's surge.

The CBOE Volatility Index, Wall Street's fear gauge,

hovered near a three-week high and was last at 19.49.

Comments from Fed policymakers including Beth Hammack

and Alberto Musalem are scheduled through the day, while the

focus will stay on Friday's non-farm payrolls data for

September.

Markets ended September higher after the U.S. Federal

Reserve kicked off its monetary-policy-easing cycle with an

unusual 50-basis-point rate cut to shore up the jobs market,

which has taken on a greater importance in the central bank's

dual mandate of price stability and low unemployment.

Investors also monitored a dockworkers' strike on the East

and Gulf coasts which entered its second day. The walkout could

cost the American economy roughly $5 billion a day, analysts at

JPMorgan estimated.

Some companies such as Walmart ( WMT ), Merit Medical

Systems ( MMSI ) and McCormick ( MKC ) said they had planned for

the strike. Their shares were flat in premarket trading.

Analysts said the spike in oil prices, along with the port

strike, could raise inflation, which neared the central bank's

2% target recently.

Dow-component Nike ( NKE ) slid 7.8% after withdrawing its

annual revenue forecast just as a new CEO is set to take the

helm.

Humana tanked 21.7% after it said it expects the

total number of members enrolled in its top-rated Medicare

Advantage plans for those aged 65 and above to decrease for

2025.

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