U.S. stock markets opened lower as September ADP employment numbers exceeded expectations. Rising tensions in the Middle East and a significant dockworkers' strike in the U.S. influenced risk appetite, despite the anticipation of non-farm payroll data.
The Dow Jones Industrial Average fell by 31.83 points, or 0.08%, to 42125.14 points. The Nasdaq Composite dropped by 44.02 points, or 0.25%, to 17866.33 points. The S&P 500 decreased by 10.61 points, or 0.19%, to 5698.14 points.
Chinese stocks traded on U.S. exchanges generally rose, pushing the Nasdaq Golden Dragon China Index up by over 5%. S3 Partners noted that the recent surge in Chinese stock markets, driven by stimulus policies, led to a loss of about $6.9 billion for short-sellers of Chinese stocks.
The Shanghai and Shenzhen 300 Index rose by over 27% since September 13, while the Nasdaq Golden Dragon Index soared by more than 36% during the same period. Analysts mentioned that short-sellers lost approximately $3.2 billion in value, erasing gains made earlier in the year. Alibaba (BABA) and JD.com (JD) were the most affected.
On the other hand, traders shorting NIO (NIO), Li Auto (LI), XPeng (XPEV), and Pinduoduo (PDD) still saw profits. Nike (NKE) shares declined sharply after the company announced a change in CEO and withdrew its full-year performance guidance. NVIDIA (NVDA) and other tech stocks underperformed for the second consecutive day.
The heightened Middle East tensions dampened risk appetite. The CBOE Volatility Index (VIX) remained above 19, highlighting ongoing market anxiety. Iran's recent missile attacks on Israel have exacerbated tensions, with concerns growing about a broader regional conflict.
As Israel initiated ground operations in Lebanon and tensions with Hezbollah escalated, investors braced for more uncertainty. West Texas Intermediate (WTI) crude oil prices rose by 3%, extending gains following the latest news from the region.
Markets also focused on a significant strike by dockworkers on the U.S. East Coast and Gulf of Mexico. The strike, disrupting operations at dozens of ports, marked the first large-scale labor action in nearly 50 years. It is expected to cost the U.S. economy billions of dollars daily and pose risks to logistics and inflation.
The September ADP employment report showed an increase of 143,000 jobs in the private sector, surpassing expectations. This contrasted with other indicators suggesting a cooling labor market, marking a rebound after months of slowing growth. Analysts await the non-farm payroll report to gauge future Federal Reserve rate cuts.
Nvidia (NVDA) has expanded its partnership with Accenture to drive AI adoption among enterprises, which is expected to increase orders for Nvidia’s products. Accenture will create a dedicated Nvidia business unit to help clients utilize and scale generative AI tools.
Tesla (TSLA) reported lower-than-expected Q3 vehicle deliveries due to competitive market conditions. The company delivered 462,890 vehicles, a 6.4% increase from the previous quarter, but below market expectations of 469,828.
Apple’s (AAPL, Financial) new iPhone 16 series saw underwhelming initial sales globally, impacting LG Display's prospects for 2024. Ireland plans to use the $14.4 billion in taxes recouped from Apple for transformative initiatives, following a recent EU court ruling.
Google (GOOGL) applied for a settlement to reduce fines by 15%, while Meta (META) announced expanded AI investments in Vietnam starting 2025. Nike’s (NKE) stock fell after JP Morgan reduced its target price, and GM (GM) reported a decline in Q3 U.S. vehicle deliveries, although EV sales saw significant growth.
