(Reuters) – U.S. stock index futures fell on Wednesday as geopolitical tensions in the Middle East and a strike at domestic ports kept investors on edge ahead of data expected to shed light on the health of the economy and the monetary policy path.
Wall Street’s major indexes got off to a dismal start to the final quarter of the year, with the S&P 500 and Nasdaq hitting roughly two-week lows last session as investors sold riskier assets after Iran fired missiles into Israel as retaliation for his attacks. in Lebanon.
Markets held steady as Israel and the US vowed to hit back, although oil stocks such as SLB and Occidental Petroleum each added about 2% in premarket trading, tracking crude prices, which rose more than 2.5 % rose as traders took into account possible oil supply disruptions. the oil-rich region. [O/R]
Defense stocks such as Lockheed Martin rose 1.3% and RTX rose 1.4% after the broader S&P 500 aerospace and defense index hit a record high last session.
“The situation remains highly volatile, but if Israel’s response is not too aggressive, markets may consider both countries to prefer to de-escalate for the second time this year after a brief hostile altercation,” ING analysts said bank.
At 5:28 a.m. ET, the Dow E-minis were down 174 points, or 0.41%, the S&P 500 E-minis were down 15.25 points, or 0.26%, and the Nasdaq 100 E-minis were down with 50.25 points, or 0.25%.
Futures tracking the small-cap Russell 2000 index fell 0.8%, while safe-haven Treasuries fell after Tuesday’s surge. [US/]
The CBOE Volatility Index, Wall Street’s fear gauge, has hovered around a three-week high and was last at 19.5.
On the data front, ADP’s September National Employment Survey, which is expected to provide insight into the state of the labor market, is due out at 8:15 a.m. ET. Key non-farm payrolls data for September is expected to be released on Friday.
Markets closed strong last month after the US Federal Reserve kicked off the monetary policy easing cycle with an unusual 50 basis point interest rate cut in an effort to support the labor market, which has become increasingly important in recent years. the dual mandate of the central bank: price stability and low unemployment.
According to CME Group’s FedWatch Tool, the odds of the Fed making a smaller quarter-percentage-point rate cut in November are 63.3%, up from 42.6% a week ago.
Investors also followed a strike by dockworkers on the East Coast and Gulf Coast that entered its second day. The strike could cost the U.S. economy about $5 billion a day, JPMorgan analysts estimate.
Some companies such as Costco, Walmart, Merit Medical Systems, McCormick and Designer Brands have said they planned the strike. Their shares were flat in premarket trading.
Analysts said the spike in oil prices, along with the port strike, could increase inflation, which recently neared the central bank’s 2% target.
Dow component Nike, among others, fell 5% after withdrawing its annual sales forecast, just as a new CEO takes over at the sportswear giant.
Markets will also analyze comments from policy makers including Beth Hammack, Alberto Musalem, Michelle Bowman and Thomas Barkin throughout the day.
(Reporting by Johann M Cherian in Bengaluru; Editing by Pooja Desai)
