US pre-open: Stock futures lower amid escalating tensions in the Middle East

2nd Oct 2024 10:48

(Sharecast News) - Wall Street futures were in the red ahead of the bell on Wednesday after major indices kicked off Q4 trading with losses.

As of 1255 BST, Dow Jones futures were down 0.34%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.16% and 0.05% weaker, respectively.

The Dow closed 173.18 points lower on Tuesday, easily reversing modest gains recorded in the previous session.

Oil prices were in focus early on Wednesday, continuing to climb as worries mounted that conflict was set to spread across the Middle East following Israel's ground invasion of Lebanon and Iran's missile attack on Israel led to renewed fears that the region was on course for full-scale regional conflict. International benchmark Brent crude was up 2% at $75.07 a barrel, while West Texas Intermediate was trading 2% higher at $71.38.

Still to come, market participants will be zeroed in on September's ADP employment change figures at 1315 BST.

Scope Markets' Joshua Mahony said: " Today sees markets increasingly shift their focus towards the jobs market, with the release of the ADP payrolls figure coming in the wake of yesterday's surprise rise in job openings. The ISM manufacturing PMI sent yet another warning signal over the weakness of hiring in the sector, with the employment metric falling back down from 46.0 to 43.9. However, with new orders or the rise, and prices collapsing to 48.3, there were certainly some reasons to be cheerful this month. The JOLTS report brought a surprise surge in openings, with the 8.04M figure reversing the declines of recent months. While layoffs remain low, we are also seeing a low level of quits as workers seek to maintain stability throughout a period where jobs have become increasingly scarce. The ADP payrolls figure provides yet another opportunity to weigh up whether a 50bp rate cut is justified or not, with predictions of another sub-100k figure highlighting the shift following a 2023 that failed to see a single reading below that threshold."

Elsewhere on the macro front, US mortgage applications fell by 1.3% week-on-week in the seven days ended 27 September, according to the Mortgage Bankers Association of America, the first drop in more than a month. Applications to refinance a mortgage fell 3%, while those to purchase a home ticked up 1%.

Still to come, Federal Reserve bankers Beth Hammack, Alberto Musalem, Michelle Bowman and Tom Barkin were all scheduled to deliver comments on Wednesday.

In the corporate space, Nike shares were down after the footwear giant withdraw its full-year guidance.

Reporting by Iain Gilbert at Sharecast.com