Overview:
On Thursday, October 3, 2024, U.S. stocks closed lower as investors took a cautious stance ahead of Friday’s highly anticipated U.S. payrolls report. The Dow Jones Industrial Average declined by 0.44%, losing 184.93 points to finish at 42,011.59. The S&P 500 dropped 0.17% to 5,699.96, and the Nasdaq Composite edged down 0.04%, closing at 17,918.48. Investors remained vigilant over the escalating conflict in the Middle East, particularly following reports of Israel’s military evacuation orders in southern Lebanon.
Labor market data revealed a slight increase in unemployment claims, while natural disasters such as Hurricane Helene and ongoing strikes at U.S. ports complicated the economic outlook. This has led to heightened expectations surrounding Friday’s non-farm payrolls report, which could be a decisive factor in shaping future Federal Reserve rate decisions. Economists expect the U.S. to have added 140,000 jobs in September, with the unemployment rate holding steady at 4.2%.
Fear & Greed Index:
Fear – Rising bond yields, geopolitical tensions, and anticipation of the labor market report weighed on market sentiment.
Key Indices (Closed Prices):
- Dow Jones Industrial Average: -0.44% at 42,011.59
- S&P 500: -0.17% at 5,699.96
- Nasdaq Composite: -0.04% at 17,918.48
Sector Performance:
Winners:
- Energy: The S&P 500 energy index rose 1.6% as oil prices surged, driven by concerns over the Middle East conflict’s impact on global crude supply.
- Services: The U.S. service sector showed strong performance, reaching a one-and-a-half-year high in September, bolstering optimism about the economy’s resilience.
Losers:
- Consumer Staples: Constellation Brands fell 4.7% after maintaining a cautious outlook for fiscal year 2025.
- Technology: Tech stocks experienced modest declines, mirroring overall market caution ahead of key labor data.
Key Movers:
- Constellation Brands (STZ): Shares dropped 4.7% after the company held its sales and profit forecast for 2025, which disappointed investors.
- ExxonMobil (XOM): Gained 1.5% as energy stocks rallied with rising oil prices amid geopolitical tensions.
- Meta Platforms (META): Declined 1.7%, reflecting broader concerns in the tech sector.
Economic Data:
- Jobless Claims: The latest report showed a marginal rise in new unemployment applications, though labor strikes and natural disasters may distort the data.
- Non-Farm Payrolls: Investors are eagerly awaiting Friday’s non-farm payrolls report, which could significantly impact expectations for the Federal Reserve’s next move. Current data suggests a potential rate cut by 50 basis points at the next Fed meeting.
Outlook:
The U.S. stock market remains on edge as investors await Friday’s labor market report. The data could determine the Federal Reserve’s stance on interest rates in the coming months. Geopolitical risks, including ongoing tensions in the Middle East, may keep energy stocks elevated, while the broader market could experience increased volatility. Defensive sectors such as energy and services are expected to perform well, while high-growth sectors like technology may face further pressure as investors brace for more labor and inflation data.
