Nasdaq, S&P Futures Sag As Downside Risks Intensify, Oil Spikes, Nike Slides: Why This Strategist Is Expecting 'Stronger' Second-Half Of October

U.S. stock futures are slipping early Wednesday after Middle East tensions and the impact of Hurricane Helene set off worries and dragged the major indices in the previous session. These added concerns sapped risk appetite that was on the wane amid the overbought levels of the market, lingering economic uncertainties, and the looming presidential election and third-quarter reporting season. On Wednesday, traders may keep a close eye on ADP’s private payrolls report, often considered a precursor to Friday’s non-farm payrolls report, due ahead of the market open, as well as comments by Federal Reserve officials.

Futures	Performance (+/-)
Nasdaq 100	-0.27%
S&P 500	-0.26%
Dow	-0.35%
R2K	-0.73%

In premarket trading on Wednesday, the SPDR S&P 500 ETF Trust (NYSE:SPY) moved down 0.17% to $567.63 and the Invesco QQQ ETF (NASDAQ:QQQ) slipped 0.16% to $480.48, according to Benzinga Pro data.

Cues From Last Session:

Wall Street pulled back sharply on Tuesday as traders reacted negatively to Iran’s missile attack on Israel, the start of a dockworkers’ strike that would handicap half of the country’s shipping and the impact of Hurricane Helene, which unleashed its fury over the Southeastern states. To make matters worse, the Institute for Supply Management’s manufacturing purchasing managers’ index contracted by more than expected.

On a positive note, job openings came in at a better-than-expected 8 million in August, the Labor Department said.

The averages opened lower and languished below the unchanged line throughout the session before closing sharply lower. All but energy, utility and communication services stocks, closed lower, with IT stock coming in for a sound thrashing.

Index	Performance (+/)	Value
Nasdaq Composite	-1.53%	17,910.36
S&P 500 Index	+0.93%	5,708.75
Dow Industrials	-0.41%	42,156.97
Russell 2000	+1.48%	2,197.03

Insights From Analysts:

October is a seasonally strong month but it often starts slow before picking up momentum as the third-quarter earnings announcements begin to drop, said fund manager Louis Navellier. “I am expecting that the second half of October will be stronger than the first half,” he said. The fund manager expects fundamentally superior stocks to benefit from earnings surprises.

Further ahead into November, the next president would have been elected and the Fed will cut interest rates again, he said. He expects consumer sentiment to improve with most of the economic and political uncertainty removed.

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Upcoming Economic Data:

• ADP is scheduled to release the private payroll report for September at 8:15 a.m. EDT. Economists, on average, expect the private sector to have added 128,000 jobs, more than the 99,000 jobs added in August.
• Cleveland Fed President Beth Hammack is scheduled to give the welcome remarks before the 2024 Minorities in Banking Forum hosted by the Federal Reserve Bank of Cleveland, at 9 a.m. EDT.
• St. Louis Fed President Alberto Musalem will provide welcome remarks for the 2024 Community Banking Research Conference at 10.05 a.m. EDT.
• The Energy Information Administration will release its weekly petroleum status report at 10:30 a.m. EDT.
• Fed Governor Michelle Bowman is due to speak at 11 a.m. EDT and Richmond Fed President Tom Barkin will make a public appearance at 12:15 p.m. EDT.

Stocks In Focus:

• NIKE, Inc. (NYSE:NKE) shares fell over 5.50% in premarket trading following the announcement of the company’s quarterly results, while Resources Connection, Inc. (NASDAQ:RGP) declined about 4.75%.
• Among those reporting on Wednesday are Conagra Brands, Inc. (NYSE:CAG), RPM International Inc. (NYSE:RPM) and Levi Strauss & Co. (NYSE:LEVI).
• Tesla, Inc. (NASDAQ:TSLA) declined over 1% ahead of the company’s quarterly deliveries report.
• Nvidia Corp. (NASDAQ:NVDA) slipped over 1.40% after it fell 3.66% on Tuesday.

Commodities, Bonds And Global Equity Markets:

Crude oil futures rose over 3% amid the Middle East tensions, while gold futures fell moderately. Bitcoin (CRYPTO: BTC) plunged over 3.75% and traded under $61.5K. The yield on the 10-year Treasury note rose 2.1 points to 3.764%.

Most Asian markets that were open for trading ended lower amid the multiple downside triggers, although the Hong Kong market, which reopened after Tuesday’s public holiday, soared. The Chinese, Indian and Taiwanese markets remained closed for public holidays.

European stocks traded in the red in early trading.

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