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Traders work on the New York Stock Exchange (NYSE) floor in New York City.
Spencer Platt | Getty Images
The S&P 500 fell on Wednesday as traders braced for more losses to start October amid escalating tensions in the Middle East.
The broad market index slid 0.3%, while the Dow Jones Industrial Average lost 116 points, or 0.3%. The Nasdaq Composite shed 0.3%.
Nike slid more than 6% after the sneaker giant pulled its full-year guidance ahead of its CEO change. Tech also struggled for a second day, with Tesla dropping more than 4% after reporting delivery numbers
The major averages are coming off a losing session as rising tensions in the Middle East dented risk appetite and investor enthusiasm for the new trading period. The Dow fell more than 170 points, while the S&P 500 and Nasdaq Composite dropped 0.9% and 1.5%, respectively.
Those moves took place after as Iran fired ballistic missiles on Israel. Investors are readying for more uncertainty as Israel begins a ground operation into Lebanon and tensions escalated with Iran-backed militant group Hezbollah.
West Texas Intermediate crude oil prices rose more than 3% on Wednesday, building on Tuesday’s jump following the news out of the Middle East. The CBOE Volatility Index (VIX), also known as Wall Street’s fear gauge, remained above 19, underscoring the heightened concern among traders.
Energy stocks bucked the downtrend again on Wednesday. The Energy Select Sector SPDR Fund (XLE) rose about 0.8%, putting the fund on track for its fourth straight winning day.
“The big worry now is should this conflict spiral into a larger scale war in the entire region, which of course could be a major October surprise,” said Ryan Detrick, chief market strategist at Carson Group.
ADP data released Wednesday showed better-than-expected private payroll growth in September. That comes ahead of Friday’s closely followed nonfarm payroll report, which could play a major role in the market’s direction and the Federal Reserve’s next rate move as its cutting cycle begins.
Correction: Ryan Detrick is chief market strategist at Carson Group. An earlier version misidentified the firm.
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