Investment sentiment increases due to Middle East risks and U.S. port union strike
Strong private employment indicators, limiting downward pressure on the stock market
▲Traders are examining stock prices at the New York Stock Exchange (NYSE) on the 9th of last month (local time). New York (USA)/Reuters Yonhap News
The New York stock market closed at a close on the 2nd (local time). While concerns continued about the intensification of the armed conflict between Iran and Israel, downward pressure was limited as private employment indicators, which the market had been paying attention to, showed signs of improvement.
On the New York Stock Exchange (NYSE), the Dow closed at 42,196.52, up 39.55 points (0.09%) from the previous trading day. The S&P 500 index closed at 5,709.54, up 0.79 points (0.01%), and the Nasdaq index, centered on technology stocks, closed at 17,925.12, up 14.76 points (0.08%).
On this day, the New York stock market showed overall depressed investment sentiment. There was also a scene where the Dow Jones Industrial Average fell during the day. The previous day, when Iran attacked Israel with a missile, Israel announced its intention to retaliate, leading to continued military tension. However, as there was no negative news such as news of a new attack during the day, there was a counter-buying trend in some technology stocks such as NVIDIA (up 1.58%).
The market is paying attention to the possibility that Israel will target oil production facilities in the event of retaliation. This is because nuclear facilities are difficult to destroy and could provoke backlash not only from Iran but also from the Arab world as a whole.
In an investment note that day, the Piper Sandler analysis team said, “If Israel retaliates, it is very likely that Iran’s oil facilities will be included,” adding, “It is expected that it will reduce Iran’s oil production capacity or attack oil and gas carriers in the Persian Gulf.” He said.
The U.S. port union’s full-scale strike also weighed on investment sentiment. The International Dockworkers Association (ILA), a U.S. port labor union, said in a statement, “Starting on the 1st, approximately 25,000 union members will go on strike at 30 ports in the eastern and Gulf of Mexico regions.” This is the first full-scale union strike at the Eastern Port in 47 years since 1977. Some estimate that this strike could cause up to $4 billion a day in damage to the U.S. economy. In particular, there are concerns that prices may rise if logistics are disrupted.
However, the news of favorable employment indicators announced on this day limited downward pressure on the stock market, and the New York stock market closed at a strong level. According to the ADP National Employment Report, private sector employment in September increased by 143,000 compared to the previous month. This is significantly higher than the market expectation of 128,000 as compiled by Dow Jones. Previously, private employment in August only increased by 99,000 compared to the previous month, recording the lowest increase in 3 years and 7 months since January 2021.
As a featured stock, Tesla fell 3.49%. The company announced that vehicle deliveries in the third quarter of this year reached 462,890 units, a 6.4% increase compared to the previous quarter. However, this fell short of the expert forecast of 463,897 units compiled by Bloomberg. Nike fell 6.77% as it withdrew its annual performance guidance.
U.S. Treasury yields rose. On this day, the 10-year maturity U.S. Treasury bond interest rate rose 0.05 percentage points (p) to 3.78%. The two-year government bond interest rate, which is sensitive to monetary policy, rose 0.04 percentage points to close at 3.64%. As private employment indicators exceeded expectations, expectations that the U.S. Federal Reserve (Fed) would cut interest rates significantly within the year have receded.
The US dollar also rose. The dollar index, which represents the value of the dollar against the currencies of six major countries, rose 0.41% from the previous day to 101.61.
Virtual assets (virtual currency) fell. According to CoinDesk, as of 7:13 a.m. on the 3rd, Korean time market capitalization The price of Bitcoin, ranked 1st, fell 0.55% from 24 hours ago to $60,541.54, and Ethereum, ranked 2nd in market cap, fell 4.02% to $2,358.18.
