Market Analysis

The S&P 500 closed nearly flat on Wednesday, with technology stocks rising, while concerns about Middle East tensions and upcoming U.S. labor data kept investors cautious.

Nvidia (NASDAQ) saw its shares increase by 1.6%, boosting the S&P 500 technology index. However, Tesla (NASDAQ) dropped 3.5% after reporting third-quarter vehicle deliveries that fell short of expectations.

Investor attention was focused on developments in the Middle East, particularly after Israel and the U.S. pledged to retaliate following Iran’s recent attack on Israel. U.S. President Joe Biden stated on Wednesday that he would not endorse an Israeli strike on Iran's nuclear facilities in response to the missile attack, urging Israel to respond "proportionally."

Earlier on Wednesday, data showed that U.S. private payrolls rose more than expected in September, further suggesting the labor market remains resilient. Investors are awaiting the release of September's non-farm payrolls on Friday, with U.S. jobless claims data expected Thursday.

"We have the jobs report on Friday, and earnings season kicks off late next week," commented Michael O'Rourke, chief market strategist at JonesTrading in Stamford, Connecticut. "We're near record highs, and with a supportive Fed, investors are waiting for positive commentary from companies before driving stocks higher. The Fed’s dovish stance is welcomed, but markets need more reason to push prices to new heights."

The Dow Jones Industrial Average rose by 39.55 points, or 0.09%, closing at 42,196.52. The S&P 500 added 0.79 points, or 0.01%, ending at 5,709.54, while the Nasdaq Composite gained 14.76 points, or 0.08%, to close at 17,925.12.

The stock market saw strong gains in September after the Federal Reserve initiated a 50-basis-point rate cut to bolster the labor market. The S&P 500 has risen 19.7% so far this year.

According to the CME Group's (NASDAQ) FedWatch Tool, the probability of a 25-basis-point rate cut at the Fed’s November meeting is 65.7%, up from 42.6% a week earlier.

JPMorgan Chase (NYSE) and other major banks are set to begin the S&P 500’s third-quarter earnings season on October 11.

Meanwhile, a strike by 45,000 dockworkers on the U.S. East Coast and Gulf Coast, which has halted shipments, continued into its second day on Wednesday with no talks scheduled between the two sides. According to analysts at JPMorgan, the strike is costing the U.S. economy approximately $5 billion per day.

Among the day's losers, Nike (NYSE) shares tumbled 6.8% after the company withdrew its annual revenue forecast, just as a new CEO is about to take charge.

Humana Inc (NYSE) shares also dropped 11.8% following the health insurer’s announcement that it expects a decline in enrollment for its Medicare Advantage plans in 2025.

Declining stocks outnumbered advancing ones by a 1.18-to-1 ratio on the NYSE, while decliners led advancers by a 1.09-to-1 ratio on the Nasdaq.

The S&P 500 recorded 27 new 52-week highs and two new lows, while the Nasdaq Composite posted 80 new highs and 133 new lows.

Total volume on U.S. exchanges was 11.81 billion shares, below the 12.05 billion average over the last 20 sessions.

Paraphrasing text from "Investing" all rights reserved by the original author.