US stocks saw modest gains, driven by better-than-expected September ADP employment data. Traders are closely monitoring increased Middle East tensions and a major dockworkers' strike in the United States, with eyes set on the upcoming non-farm employment report.
The Dow Jones Industrial Average rose 48.08 points (0.11%) to 42,205.05, the Nasdaq Composite gained 27.43 points (0.15%) to 17,937.79, and the S&P 500 increased 0.86 points (0.02%) to 5,709.61.
Chinese stocks listed in the US surged, with the Nasdaq Golden Dragon China Index up 3.7%. S3 Partners reported that Chinese market gains have resulted in $6.9 billion in losses for traders shorting these stocks. The Shanghai-Shenzhen 300 Index has risen over 27% since mid-September, while the Golden Dragon Index has climbed more than 36% during the same period.
The stocks most painful for short sellers include Alibaba (ticker: BABA) and JD.com (ticker: JD). However, short positions on Nio (ticker: NIO), Li Auto (ticker: LI), XPeng (ticker: XPEV), and Pinduoduo (ticker: PDD) remain profitable.
Nike (ticker: NKE) shares fell sharply as the company announced a CEO change and withdrew its yearly performance guidance. Tech stocks like NVIDIA (ticker: NVDA) also underperformed for a second consecutive day.
Geopolitical risks, particularly involving Iran and Israel, heightened market anxiety. Iran launched dozens of ballistic missiles targeting key military and security locations in Israel, triggering retaliation promises from Israel and the US.
As the conflict between Israel and Hezbollah in Lebanon escalates, investors brace for more uncertainty. This geopolitical tension has driven West Texas Intermediate crude oil prices up by 3%, continuing a rally fueled by fears of supply disruptions.
A significant dockworkers' strike also impacted market sentiment. Dockworkers on the US East Coast and Gulf Coast began a strike, disrupting half of US seaborne trade. The strike, predicted by analysts to cost the US economy billions daily, stemmed from failed labor contract negotiations.
September ADP employment data showed a private sector job increase of 143,000, surpassing the expected 125,000. Although this marks a labor market rebound, it contrasts with other cooling labor market indicators.
In focus stocks, NVIDIA (ticker: NVDA) expanded its partnership with Accenture, aiming to boost AI adoption and increase orders for its chips. Tesla's (ticker: TSLA) Q3 deliveries fell short of expectations, delivering 462,890 vehicles against an anticipated 469,828.
Apple's latest iPhone 16 series saw underwhelming initial sales, impacting LG Display's future performance. Ireland announced plans for Apple’s €13 billion back tax, confirmed by a recent EU court ruling in favor of the European Commission's 2016 decision.
Google's penalty costs are expected to drop by 15% via an Indian settlement. Meta Platforms aims to expand AI investments in Vietnam, beginning VR device production by 2025.
West Texas Intermediate crude oil futures rose 0.39% to $70.10 per barrel.
