[New York Stock Market] US Strong Employment Data and Middle East Tensions Lead to Slight Gains... Focus on April 4 Employment Report

ADP Private Employment Growth Exceeds Expectations
Uncertainty Rises Due to Israel-Iran Tensions
Focus on US Labor Department September Employment Report on 4th

The three major indices of the U.S. New York stock market closed slightly higher on the 2nd (local time). Investors were relieved by stronger-than-expected employment data but remained cautious ahead of the U.S. Labor Department's September employment report to be released on the 4th. Rising tensions in the Middle East also limited investor sentiment.

[Image source=EPA Yonhap News]

On that day in the New York stock market, the blue-chip-focused Dow Jones Industrial Average closed at 42,196.52, up 39.55 points (0.09%) from the previous trading day. The large-cap-focused S&P 500 index rose 0.79 points (0.01%) to 5,709.54, and the tech-heavy Nasdaq index ended trading at 17,925.12, up 14.76 points (0.08%).

The market focused on employment data that day. According to ADP, a private labor market research firm, private sector new job creation in September increased by 143,000. This was 40,000 more than August's 103,000 and significantly exceeded experts' expectations of 124,000. Despite concerns about a cooling U.S. labor market, employment remained more resilient than expected. As a result, the market sentiment shifted toward waiting for the government employment report to be released on the 4th.

Chris Larkin, Head of Trading and Investment at Morgan Stanley E*TRADE, said, "The ADP employment figures today suggest that the labor market remains unbroken," adding, "We will need to see the monthly employment report on the 4th to draw a final conclusion on the current job situation."

Market expectations for a 'big cut' of 0.5 percentage points in interest rates at next month's Federal Open Market Committee (FOMC) meeting are retreating. According to the Chicago Mercantile Exchange (CME) FedWatch, the federal funds futures market on that day priced in a 65.4% chance that the U.S. Federal Reserve (Fed) will cut rates by 0.25 percentage points in November, sharply up from 42.6% a week ago. Conversely, the probability of a 0.5 percentage point cut fell from 57.4% to 34.6%.

Rising tensions in the Middle East also limited investor sentiment. Iran launched a large-scale missile attack on Israel the previous day, raising concerns that a full-scale war could expand in the Middle East. Although Iran declared the missile attacks had ended and drew a line against further provocations, Israel has announced retaliatory measures. Simultaneous strikes by port workers in the southeastern U.S. added to the uncertainty.

Investors are focusing on the September employment report to be released on the 4th. According to a Bloomberg survey, nonfarm payrolls are expected to have increased by 146,000 in September, up 4,000 from August's 142,000. The unemployment rate for September is forecast to remain steady at 4.2%, the same as the previous month. The market is likely to use the employment report to assess the current labor market and economic conditions.

By individual stocks, Tesla fell 3.49%. Tesla announced that its third-quarter vehicle deliveries reached 463,890 units, falling short of market research firm LSEG's forecast of 469,828 units. Insurance company Humana dropped 11.79%, and sports brand Nike declined 6.77% after postponing its annual earnings outlook.

Government bond yields remained steady. The U.S. 10-year Treasury yield, a global bond yield benchmark, traded at 3.78%, and the 2-year Treasury yield, sensitive to monetary policy, was at 3.63%, both at levels similar to the previous day.

International oil prices continued to rise amid escalating Middle East tensions. West Texas Intermediate (WTI) crude oil closed at $70.10 per barrel, up $0.27 (0.39%) from the previous trading day, while Brent crude, the global oil price benchmark, rose $0.34 (0.46%) to $73.90 per barrel.