U.S. stocks were mixed on Wednesday as Israel-Iran tensions fueled concerns over an escalating Middle East conflict, prompting market caution.
The S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) pushed just above the flat line. Meanwhile, the tech-heavy Nasdaq Composite ( ^IXIC ) rose about 0.2%.
As geopolitical concerns gripped markets, stocks were under pressure to start October, shrugging off an upbeat mood on hopes of a US interest rate cut. At the same time, oil extended a rally that sent prices up more than 5% on Tuesday, the most in nearly a year.
Brent crude (BZ=F) and West Texas Intermediate (CL=F) futures both rose about 3% on Wednesday, as traders paid a premium amid the prospect of supply risks from heightened Israel-Iran attacks.
The focus is on the possibility that rising oil prices could push US inflation higher, disrupting the Federal Reserve's progress. At the same time, tensions in the Middle East and the risk of US port strikes disrupting supply chains fueled concerns about the US economy — just as investors were becoming confident of a “soft landing.”
The latest ADP data released on Wednesday showed the private sector added 143,000 jobs in September, above economists' estimate of 125,000 and significantly higher than the 99,000 seen in August. The release follows mixed data on job openings and comes ahead of Friday's key September jobs report as investors discuss the Fed's interest rate-cutting path.
Read more: What Fed Rate Cuts Mean for Bank Accounts, CDs, Loans and Credit Cards
Meanwhile, Nike ( NKE ) shares fell 7% after the sports shoe giant cut its outlook for the year, on lower first-quarter revenue. “We haven't turned the corner yet,” its CFO told analysts on a conference call.
Tesla's ( TSLA ) global deliveries rose in the third quarter but fell short of Wall Street estimates. Shares of the EV maker fell after the report.
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Interest in Apple's iPhone is growing — but not because of AI: JPMorgan survey
Good news for Apple ( AAPL ): A JPMorgan ( JPM ) survey released Wednesday found that more consumers are looking to buy iPhones than last year — but not because of recently released AI features.
The report found that 68% of roughly 500 consumers surveyed wanted to buy a new iPhone — up from 63% reported in the previous two years. About 55% of consumers looking to buy a new iPhone are non-iPhone users, up from 41% in 2023 and 43% in 2022.
AI features were not a top reason for wanting to buy a new phone. Instead, they said they want a faster device with 5G connectivity.
“[W]I believe staggered launches and limited availability of features for consumers to try are driving this trend,” JPMorgan analyst Samik Chatterjee in a research note.
Apple iPhone sales have struggled this year, with the tech giant recording its biggest decline in years since the pandemic in the second quarter. Sales beat analysts' expectations in the third quarter but were still lower than in 2023.
Wall Street has so far been disappointed with demand for the iPhone 16, the first phone (albeit limited) with Apple Intelligence features.
Oil gains more than 2% on disruption concerns as Israel vows to retaliate after Iran attack
Oil prices rose on Wednesday after Israel vowed to retaliate against Iran's attack amid rising tensions in the Middle East.
West Texas Intermediate (CL=F) rose 3% to near $72 a barrel. Brent (BZ=F), the international benchmark price, rose more than 2% to trade just below $75.
Wednesday's gains followed Tuesday's sharp move after Iran fired nearly 200 ballistic missiles into Israel in response to an Israeli ground operation in southern Lebanon.
Tel Aviv has vowed to retaliate against Tehran. According to the Axios report, Iran's oil facilities could be targeted.
Read the full story here.
Nike stock falls as company withdraws guidance amid CEO change
Nike stock ( NKE ) sank nearly 7% Wednesday after the company reported fiscal first-quarter revenue that missed estimates and scaled back its outlook for the year amid a CEO transition.
The shoe giant reported first-quarter earnings of $0.70 per share, topping Wall Street estimates of $0.52 and down 26% from the year-ago period. Meanwhile, Nike's revenue of $11.59 billion fell short of analysts' estimates of $11.65 billion and fell 10% from the year-ago quarter.
Nike's sales declined in both its direct-to-consumer business and its wholesale division. Nike Direct revenue was $4.7 billion, down 13% from the same quarter a year ago.Wholesale revenue was $6.4 billion, down 8% from the year-ago period.
“Returns of this scale take time, and while there have been some early wins, we have yet to turn the corner,” Nike CFO Matthew Friend said on the company's earnings call Tuesday night.
Read the full story here.
Tesla's stock fell after the delivery was missed
Tesla ( TSLA ) stock fell more than 5% on Wednesday morning after the company announced third-quarter deliveries that fell short of Wall Street expectations.
The electric vehicle maker delivered 462,890 vehicles in the three months to September 30, up 6.4% from the previous quarter. That was lower than Wall Street's expectation of 463,897 vehicle deliveries.
Read the full story here.
Stocks tend to slide at the open as oil prices rise
U.S. stocks fell further on Wednesday as Israel-Iran tensions fueled concerns about an escalating Middle East conflict, prompting market caution.
The S&P 500 (^GSPC) fell about 0.3%, while the Dow Jones Industrial Average (^DJI) shed about 0.2%, as investors braced for Israel's promised retaliation for a massive missile attack by Iran. The Nasdaq Composite (^IXIC) was about 0.2% lower.
The tension has caused oil prices to rise. Brent crude (BZ=F) and West Texas Intermediate (CL=F) futures both rose about 3% on Wednesday, as traders paid a premium amid the prospect of supply risks from heightened Israel-Iran attacks.
The private sector added more jobs in September than expected
New ADP data released on Wednesday showed the private sector added more jobs in September than expected. ADP chief economist Nella Richardson described it as a “pretty healthy and broad rebound” in hiring.
ADP's national employment report showed 143,000 jobs were added in the month, above economists' estimate of 125,000 and significantly higher than the 99,000 seen in August.
