The S&P 500 ended little changed on Wednesday, with technology shares gaining but investors nervous about Middle East tensions and more U.S. labor data due this week.
Nvidia shares rose 1.6%, helping to lift the S&P 500 technology index. However, Tesla shares fell 3.5% after the electric carmaker reported third-quarter vehicle deliveries below estimates.
Investors monitored Mideast news after Israel and the U.S. vowed to strike back following Iran’s attack on Israel on Tuesday. U.S. President Joe Biden said on Wednesday he would not support any Israeli strike on Iran’s nuclear sites in response to its missile attack and urged Israel to act “proportionally.”
Data released early on Wednesday showed U.S. private payrolls increased more than expected in September, further evidence that the labor market is not deteriorating. Investors remained focused on September non-farm payrolls data due on Friday, while U.S. jobless claims data is due Thursday.
“We have the jobs report Friday, and then earnings season starts at the end of next week,” said Michael O’Rourke, chief market strategist at JonesTrading in Stamford, Connecticut.
“We’re near all-time highs, and we know we have a friendly Fed out there. Before they push stocks to another round of new highs, investors want to hear some positive commentary from companies. People like that the Fed is very dovish and they are just waiting for another reason to push prices higher.”
The Dow Jones Industrial Average rose 39.55 points, or 0.09%, to 42,196.52. The S&P 500 gained 0.79 points, or 0.01%, at 5,709.54 and the Nasdaq Composite edged up 14.76 points, or 0.08%, to 17,925.12.
The market ended September with strong gains after the Federal Reserve kicked off its monetary policy easing cycle with an unusual 50-basis-point rate cut to shore up the jobs market. The S&P 500 is up 19.7% for the year so far.
Odds of a quarter-percentage-point rate reduction at the Fed’s November meeting are at 65.7%, up from 42.6% a week ago, the CME Group’s FedWatch Tool showed.
JPMorgan Chase and other big banks will kick off S&P 500 third-quarter earnings season on Oct. 11.
A strike by 45,000 dockworkers halting shipments at U.S. East Coast and Gulf Coast ports entered its second day on Wednesday with no negotiations scheduled between the two sides, sources told Reuters.
The dockworkers’ strike is costing the economy roughly $5 billion per day, JPMorgan analysts estimated.
Among declining shares, Nike dropped 6.8% after the athletic footwear and apparel maker withdrew its annual revenue forecast just as a new chief executive is set to take charge.
Shares of Humana Inc fell 11.8% after the health insurer said it expected enrollment in its top-rated Medicare Advantage plans for those aged 65 and above to decrease for 2025.
Declining issues outnumbered advancers on the NYSE by a 1.18-to-1 ratio; on Nasdaq, a 1.09-to-1 ratio favored decliners.
The S&P 500 posted 27 new 52-week highs and two new lows; the Nasdaq Composite recorded 80 new highs and 133 new lows.
Volume on U.S. exchanges was 11.81 billion shares, compared with the 12.05 billion average for the full session over the last 20 trading days.
The U.S. dollar will hold steady in coming months despite an expected series of Federal Reserve interest rate cuts, according to median forecasts from FX strategists polled by Reuters who were, however, largely split on the currency’s broad direction.
Since July the greenback has lost almost all the near-5% gains against a basket of major currencies accumulated through mid-year on expectations the Fed would reduce its funds rate from what many considered an overly-restrictive level. However, the currency has been mostly stable in recent weeks.
With price pressures now broadly thought to have been tamed, the central bank started easing last month with an oversized half-percentage-point cut to forestall any further weakening in the job market in the world’s largest economy.
The Fed was expected to cut its key policy rate by 25 bps in both November and December, according to a majority of over 100 economists in a separate snap Reuters survey taken after the September meeting.
While in line with the Fed’s own projections and chair Jerome Powell saying policymakers were not “in a hurry” to cut rates, that expectation was shallower than the near-72 bps of easing interest rate futures are currently pricing.
Despite this, the dollar would remain resolute in coming months with the euro, currently around $1.11, seen holding that level by year-end and through end-March, according to median forecasts of nearly 80 strategists in a Sept. 30-Oct. 2 Reuters poll.
The common currency was then expected to strengthen about 2% to $1.13 in a year, the survey showed, consistent with calls for dollar weakness analysts have held for the majority of this year.
“While it has been our view a global soft landing combined with Fed easing should, if realized, eventually result in broad dollar weakness, the path to get to that destination at least in the near-term could be treacherous,” noted Meera Chandan, FX strategist at JP Morgan.
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