US Market Performance Amid Middle East War, Job Data; Dow Jones, S&P, Nasdaq Struggles On October 2

The US market struggled to keep bulls on Wednesday, October 2, as rising tensions in the Middle East escalated uncertainties ahead. Dow Jones, S&P 500, and Nasdaq traded in a see-saw pattern. Israel is currently in a two-front war, with a ground invasion of Lebanon, a region ruled by Iran's proxy Hezbollah. All sides are losing heavy personnel, and all have vowed to fight ahead.

As per the latest update, Israel reported the loss of some 8 soldiers in the southern region of Lebanon, the first intense deadly blow to Israel after taking out key commanders and leader Hassan Nasrallah of Hezbollah.

The limited ground invasion of Israel in Lebanon continues, alongside sweeping of Hamas terrorists in Gaza. At the same time, the Jewish country has promised to retaliate against Iran's latest barrage of some 200 missiles on their soil.

Iran, meanwhile, has stated that it is not looking for war despite the latest attack, and further hinted that it will give a stronger response to Israel's retaliation over it.

US stocks traded volatile as the tensions in the Middle East continued to escalate. Further, investors were cautioned after a stronger-than-expected jobs data.

The latest ADP National Employment report showed that U.S. private payrolls surged by 143,000 in September 2024, higher than market expectations.

US Market On October 2, Wednesday:

Dow Jones: The Dow Jones Industrial Average or DJIA, opened at 42,125.14, but slipped to an intraday low of 41,968.79. Currently, the stock index is marginally up by 64 points and holding above 42,200 zones, after hitting an intraday high of 42,259.52. In the previous session, DJIA was at 42,156.97.

S&P 500: The index opened at 5,698.14, lower than its previous close of 5,708.75. The index even touched an intraday low of 5,674, while the day's high is 5,719.63. Currently, the S&P 500 index is marginally up and trading near 5,713.

Nasdaq Composite: Also, opening lower at 17,867.12, the tech-heavy index touched an intraday high and low of 17,978.57 and 17,767.79. Currently, the index is up 40 points and trading above 17,950 levels. In the previous session, the index stood at 17,910.36.

On the stock performance, Trading Economics data stated that escalating geopolitical risks dampened the optimism that had emerged around potential US interest rate cuts. Meanwhile, economic data showed stronger-than-expected job growth, with 143,000 private-sector jobs added in September. Investors await Friday's jobs report for further insight into the economy and the Fed's interest rate decisions.

Notably, Elon Musk's Tesla stock dipped by 3.3% to trade at $249.44. This comes after the electric car giant announced that it produced approximately 470,000 vehicles in Q3, delivered approximately 463,000 vehicles and deployed 6.9 GWh of energy storage products.

Uncertain Times Ahead?

Dr Manoranajan Sharma Chief Economist- Infomerics Ratings said, Iran's launching of hundreds of missiles towards Israel, with at least some striking Israeli territory in response to Israeli attacks against people in Gaza and Lebanon, and the assassinations of top IRGC, Hamas and Hezbollah leaders' marks yet another flashpoint in the year-old Middle East war scenario. The second attack by Iran this year, after it fired hundreds of missiles and drones at Israel in April marks an unmistakable deterioration and a clear escalation of the regional war scenario.

Sharma added, "It's no brainer to say that Israel will respond in a more than disproportionate manner because such military "actions" have inevitable "consequences"."

Further, he said, "Where do we go from here? Difficult to say. With the US standing clearly with Israel, its long-time strategic and military partner, all bets are off and things would quickly move from bad to worse. Netanyahu ominously said Iran had made a "big mistake" and would "pay for it". Similarly, Israel Defense Forces spokesperson Daniel Haggari averred "We have plans, and we will operate at the place and time we decide".

There is no doubt about a massive Israeli retaliation, the only issue that remains to be seen is the scale, place and timing of the retaliation, Sharma said. Also, he added, this escalation of the war, widening conflict and heightening of geopolitical tensions rocks the global scenario with incertitude and uncertainties.