U.S. Major Indexes Struggle After Crude Oil Extends Weekly Gains to 5%

Barry Adams
03 Oct, 2024
New York City

Stocks wavered on Wall Street amid rapidly escalating tensions in the Middle East, and the dockworkers strike showed no signs of easing. 

The S&P 500 index decreased 0.1%, the Nasdaq Composite declined 0.2%, and the crude oil price extended its weekly gain to 5% amid escalating tensions in the Middle East. 

Tensions in the Middle East rose after Israel escalated its attack on Beirut and continued its ground offensive in Gaza. 

Market sentiment soured on the growing worries that Israel is likely to target the oil infrastructure of Iran, further lifting oil prices and stoking inflation. 

Losses on Wall Street were muted after the service sector index showed its strongest performance in September, according to the latest update by the Institute of Supply Management. 

The ISM Service Index showed that 54.9% of businesses reported expansion, up from 51.9% in August and the best reading since February 2023. 

The service sector activities expanded for the 49th month in 52 months, highlighting the strength in new orders and business activity expansion. 

Initial jobless claims increased by 6,000 to 225,000 in the last week, and continuing claims were little changed at 1.826 million, the U.S. Department of Labor reported Thursday. 

The initial claims rose to a record high, confirming the labor market softening trend and supporting the case for a possible rate cut at each of the remaining policy meetings in the year. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index decreased 0.1% to 5,709.83, the Nasdaq Composite fell 0.2% to 17,941.08, and the Russell 2000 index fell 0.5% to 2,183.22. 

The yield on 2-year Treasury notes edged higher to 3.70%, 10-year Treasury notes inched up to 3.80%, and 30-year Treasury bonds inched higher to 4.17%.

WTI crude oil increased $3.32 to $73.29 a barrel, and natural gas prices edged up 7 cents to $2.96 a thermal unit.

Gold fell by $10.66 to $2,649.42 an ounce, and silver decreased by $0.08 to $31.76.

The dollar index, which weighs the US currency against a basket of foreign currencies, edged higher to 101.93.

 

U.S. Stock Movers

Levi Strauss dropped 7.2% to $19.49, and the denim maker reported mixed results in the third quarter. 

Bank of America declined 0.9% to $38.91 after Warren Buffett Controlled Berkshire Hathaway continued to lighten its holding in the bank. 

Berkshire sold 8.5 million shares over the last three days for $338 million, according to the latest SEC filing. 

Berkshire, the diversified conglomerate, started selling its holding in the bank since mid-July and now lowered its stake to 10.2%. 

Hims & Hers Health dropped 14% to $16.30, and investors fear a sharp fall in demand for its pharmaceutical preparation as an alternative to Eli Lilly's GLP-1 treatment. 

The Food and Drug Administration said that the GLP-1 treatment shortage has been resolved, which is likely to reduce the addressable market for Hims & Hers compounds. 

Hims & Hers sells injections of semaglutide, a key ingredient used in Wegovy, the rival drug made by Novo Nordisk, which remains on the FDA's shortage list. 

Nvidia Corp. jumped 3.1% to $122.59, and the company's chief executive confirmed that Blackwell, its next generation artificial intelligence processor, "is in full production." 

“Blackwell is in full production, Blackwell is as planned, and the demand for Blackwell is insane,” CEO Jensen Huang said in an interview with CNBC on Wednesday. 

Crude oil explorers traded higher after crude oil prices extended their weekly rise to above 5% after tensions escalated in the Middle East. 

Exxon Mobil jumped 1% to $122.96, Chevron rose 0.7% to $122.96, and Occidental Petroleum added 1.6% to $54.30.