Key Points:
The S&P 500 index (Symbol: SP500) remained unchanged as tech shares saw some gains, with Nvidia (Symbol: NVIDIA) rising 1.6%, but were balanced by a 3.5% drop in Tesla (Symbol: TSLA).
Picture: The S&P 500 index trades in consolidation as tech gains were offset by Middle East tension, as observed on the VT Markets app.
Markets were spooked following geopolitical tensions in the Middle East, with concerns over how a potential escalation might impact global markets. President Biden’s call for proportional response from Israel following Iran’s missile strike kept traders on alert.
Private payrolls for September beat expectations, reinforcing a resilient labour market. The focus now turned to the non-farm payrolls this Friday, which is expected to provide key insights into the Fed’s next steps.
Traders are currently pricing in a 65.7% chance of an interest rate cut in November, up from 42.6% last week.
While the Dow Jones (Symbol: DJ30) rose 39.55 points, or 0.09%, and the Nasdaq (Symbol: NAS100) gained 14.76 points, the market remained cautious.
The ongoing strike by 45,000 dockworkers, costing $5 billion per day, adds to uncertainty.
As earnings season approaches, with JPMorgan (Symbol: JPM) set to kick off next week, traders are likely to remain on the sidelines awaiting further clarity.
More clarity can be seen upon the jobs report due on Friday. Strong data may limit upside due to expectations of less Fed easing, while weaker data could open the door for further rate cuts.
With Middle East tensions and supply chain disruptions, traders may seek safety in defensive sectors, with risk management practices being adhered to with strong discipline.
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