The S&P 500 ended little changed on Wednesday, with technology shares gaining but investors nervous about Middle East tensions and more U.S. labour data due this week. The TSX closed slightly lower, weighed by declines for industrials and heavily weighted financial shares.
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 labour 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.
The Canadian 10-year bond yield climbed 8.1 basis points to 3.027% as recent upbeat U.S. data tempered expectations for another supersized interest rate cut by the Federal Reserve next month.
“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.
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.
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 US$5 billion per day, JPMorgan analysts estimated.
The S&P/TSX composite index ended down 32.44 points, or 0.1%, at 24,001.55, after touching a record high of 24,113.27 earlier in the day.
On Tuesday, the TSX notched a record closing high as escalating tensions in the Middle East led to a jump in oil prices, boosting energy shares.
Financials, which account for 31% of the TSX’s weighting, fell 0.3%, while industrials ended 0.4% lower as railroad shares lost ground.
Consumer staples was down 1.4% and real estate, which tends to be particularly sensitive to the interest rate outlook, declined 0.8%.
Information technology helped limit the Toronto market’s decline, rising 0.6%, and energy added 0.2% as the price of oil settled 0.4% higher at US$70.10 a barrel.
Among declining shares in the U.S., 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.
Reuters, Globe staff