Iran fired over 100 ballistic missiles at Israel on Tuesday, pushing oil prices for West Texas Intermediate and Brent to their biggest increases in nearly a year. The attack led to a volatile day on Wall Street, with U.S. stocks closing firmly lower. The tech-heavy Nasdaq Composite led the declines, shedding around 1.5%.
The Dow Jones Industrial Average moved about 0.4% lower, while the benchmark S&P 500 finished the day down roughly 0.9%. West Texas Intermediate settled more than 3% higher to trade just above $70 per barrel. Brent, the international benchmark price, also climbed roughly 3% to hover around $74 per barrel.
James Reilly, senior markets economist at Capital Economics, noted that “the impact on oil prices will remain the key channel of transmission to the global economy.”
Energy and utilities led Tuesday’s sector action, up about 1.8% and 0.4%, respectively. Energy stocks surged on the back of rising oil prices, while technology lagged amid broader market declines. New jobs and manufacturing data kicked off the new quarter as investors searched for further clues on the future of the Federal Reserve’s easing cycle after Fed Chair Jerome Powell hinted the central bank might rapidly cut rates.
Job openings surprisingly increased in August, furthering the narrative that while the labor market is cooling, it’s not rapidly slowing. There were 8.04 million jobs open at the end of August, an increase from the 7.71 million seen in July. The Institute for Supply Management (ISM) said its manufacturing PMI was unchanged at 47.2 last month.
iran missile attack impacts oil prices
Despite holding steady, the reading still came in weak, as a PMI below 50 indicates a contraction in the manufacturing sector. The data sets investors up for Friday’s September jobs report, the highlight in a week where investors are watching for confirmation that the US economy is cooling, rather than crumbling.
In other news, a large-scale work stoppage on the East and Gulf coasts threatens to halt the flow of half the US’s ocean shipping. Disruption from the stoppage could cost the economy billions of dollars a day, stoke inflation, and put jobs at risk. Nike stock dropped around 2% lower in after-hours trading on Tuesday after the company’s first quarter earnings beat expectations.
The shoe giant reported first-quarter earnings per share of $0.70, surpassing Wall Street’s expectations of $0.52. However, Nike’s revenue of $11.59 billion fell short of analyst estimates of $11.65 billion. Both metrics saw year-over-year declines from the same quarter a year ago.
This report is Nike’s first since the company announced a CEO change amid lackluster sales growth. Elliott Hill, a former Nike executive who retired in 2020, will replace John Donahoe as CEO on Oct. 14.
Shares of the company have slumped this year, falling more than 25% prior to the CEO changeup announcement on Sept. 19.
