2nd October 2024 – (New York) U.S. stock markets edged lower on Tuesday, as investors grappled with fresh economic data and escalating geopolitical tensions in the Middle East. The Dow Jones Industrial Average fell by approximately 0.5%, while the S&P 500 dropped about 1%, reversing some of the gains from a record-setting previous quarter. The Nasdaq Composite suffered more pronounced losses, declining around 1.7% in early trade.
This downturn coincides with a new tranche of economic indicators that investors are scrutinizing to gauge the trajectory of the U.S. economy. Notably, job openings in August defied expectations by rising to 8.04 million from July’s 7.71 million, suggesting resilience in the labour market despite broader economic headwinds.
Concurrently, the U.S. manufacturing sector’s performance remained tepid, with the Institute for Supply Management’s (ISM) manufacturing PMI holding steady at 47.2 in September, a figure signalling contraction.
The market’s movements were further influenced by reports of Iran preparing for a potential missile strike against Israel, an announcement that spurred a flight to safety among investors, lowering bond yields and pushing crude oil prices higher.
The geopolitical risks, coupled with domestic economic concerns, have kept market participants on edge as they await further clues from the Federal Reserve. Despite recent hints by Fed Chair Jerome Powell that the central bank may slow its rate-cutting pace, investors remain cautious.
Adding to the complexity of the current economic landscape is the commencement of a strike by dockworkers on the East and Gulf coasts, which threatens to severely disrupt U.S. supply chains. The strike could potentially halt half of the nation’s ocean freight, leading to multi-billion dollar daily losses, exacerbating inflationary pressures, endangering jobs, and carrying significant political ramifications.
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