4:20pm: Wall Street closes lower
Stocks closed sharply lower on Tuesday as Iran fired over 100 ballistic missiles at Israel, driving significant increases in oil prices.
The Nasdaq led the declines, falling 1.5% to close at 17,910, while the Dow Jones dipped 0.4% at 42,157 and the S&P 500 closed down 0.9% at 5,709 after hitting record highs last month.
3:40pm: Tech stocks take a hit
US tech stocks are lower across the board as tensions in the Middle East have ratcheted up substantially.
"While there is no obvious reason why US tech should sell off on the back of Middle East tensions, it could be a rapid reallocation of resources to safe havens, in case this leads to a prolonged conflict in the region," writes Kathleen Brooks of XTB.
"The US has pledged to defend Israel if it comes under attack from Iran, the question now is, how far will Iran have to go for the US to step in? Investors could be willing to take profit from the top performing tech stocks and move money into safe havens until the situation in the Middle East calms down."
2:00pm: Broadening Middle East tensions
Military conflicts, like the current standoff between Iran and Israel, can rapidly escalate.
That could trigger inflows into safe haven assets such as gold and Treasuries.
"It is akin to lighting a match and suddenly the flame can't be controlled," Quincy Krosby, Chief Global Strategist for LPL Financial commented.
"With regard to the current standoff between Iran and Israel - with Hezbollah and Lebanon heavily intertwined- the increasing presence of the U.S. , coupled with an intense diplomatic lobbying effort, could lead to a prolonged standoff.
"Still, there's always a concern that there's an accident that fuels another round of escalation."
12:25pm: Stocks fall
Stocks were broadly lower by midday as investors reacted to new economic data and concerns over a potential missile strike from Iran against Israel, which also led to lower bond yields and a rise in crude oil prices.
The Dow Jones dropped about 0.5%, while the S&P 500 fell approximately 1%, with the tech-heavy Nasdaq Composite declining around 1.7%.
Fresh data revealed an unexpected increase in job openings in August, indicating that while the labor market is cooling, it is not rapidly declining, prompting investors to seek insights into the Federal Reserve's future rate-cutting plans.
11:30am: Unexpected rise in job openings signals stabilization in labor market
More reaction to the JOLTS release, this time from Comerica's Bill Adams.
"Labor demand rose unexpectedly in the August job openings report. This noisy indicator is starting to suggest a stabilization of the job market as the Fed pivots," Adams wrote.
"August’s jump in job openings reflected higher openings in a number of industries, including transportation, warehousing, and utilities, information, professional and business services, and accommodation and food services. Openings also rose in state and local government.
"Relatively few workers are being fired or laid off, and few are leaving jobs voluntarily for other opportunities, either."
Adams also noted that the weak ISM manufacturing PMI and construction spending reports highlight the burden of high interest rates on credit-sensitive sectors, but the economic impact is being offset as the Fed cuts rates, despite facing additional challenges from Hurricane Helene and a dockworkers strike, with Helene's effects resembling those of Hurricane Beryl in Southeast Texas.
"Helene won’t affect the September jobs report’s release Friday but will likely weigh on job growth in the October report (to be released November 1). The impact of Helene and the strike also will likely affect October’s retail sales, industrial production, and jobless claims data, making the economy’s trend harder to tease out in the late fall months."
10.36am: Economic data more positive than recent releases
Missed amid the explosive Iran news was the release of more US economic data, including the ISM manufacturing index and JOLTS job openings.
The ISM index remained unchanged for September, although economists said the jump in the production index and rebound in new orders paint a slightly less negative picture heading into the fourth quarter.
The ISM reading stayed at 47.2 for September, mostly attributable to a slump in the inventories index to 43.9 from 50.3, offsetting a jump in the production index to 49.8 from 44.8.
So the top-line reading is "arguably stronger than it first appears", sayd Bradley Saunders, Capital Economics' North America economist.
"Overall, the survey data hint at a less negative outlook for the manufacturing sector than recent releases, though ongoing strikes at Boeing and ports along the East and Gulf Coasts, as well as disruption from Hurricane Helene, may have a negative influence on October’s headline figure."
The job openings and labor turnover survey (JOLTS) job openings for August, meanwhile, came in at 8.040 million up from 7.673 million, which was higher than expected.
John Choong, head of equities and markets at Investors Edge, said: "A deeper dive into the data revealed a more complex landscape in the latest JOLTs numbers.
"The bulk of new openings actually came from the construction and government sectors, which have been propping up recent non-farm payroll numbers."
Excluding these, Choong says there was a significant 93k decline in service sector openings, which aligns with the contraction in employment noted in the latest ISM manufacturing PMI.
"This sectoral divergence is crucial. It suggests that while some areas of the economy remain robust, others are showing signs of weakness — and the drop in job quits to a 3-year low confirms this.
"Thus, looking ahead to Friday's non-farm payrolls, we expect August's number to be revised downwards, due to weaker-than-expected services employment. However, we anticipate September's headline number to continue trending above 100k, masked by government hiring."
10.26am: Iran missile attack 'would have repercussions'
The US is actively supporting preparations to defend Israel against a possible attack from Iran, Bloomberg and Reuters are reporting.
An attack would carry severe consequences for Iran, an official told the newswires.
Meanwhile, an Israeli military spokesman said the country had not yet identified an aerial threat from Iran, with Israel's aerial defence systems fully prepared.
The Israeli spokesperson also warned that any Iranian attack on Israel would have repercussions.
Israel and Iran launched missiles into each other's territory in April this year.
On Wall Street, the Nasdaq Composite index is down 1.5%, with only five of the top 50 largest stocks in the green.
The S&P 500 has fallen 0.95%, while the Dow Jones is down 0.6%, helped by a 1% rise for Chevron, while the Russell 2000 is down 1.4%.
10.05am: Iran missile reports
What has hit markets around the world are reports from the US that Iran is preparing to launch a ballistic missile attack against Israel.
European markets are now all in the red, apart from London's FTSE 100, where the index's defence companies and oil majors are doing a lot of the lifting.
10-year US treasury yield yield have sunk to a session low of 3.5715% on the Iran reports.
Oil prices, which were down earlier, are now up, with Brent crude jumping to $73.5 from $70 earlier.
Oil majors like ConocoPhillips (NYSE:COP), Exxon Mobil Corp (NYSE:XOM) and Marathon Oil Corp (NYSE:MRO), and defence companies including Northrop Grumman Corp (NYSE:NOC) and Lockheed Martin Corp (NYSE:LMT) were among S&P risers, all up 1.2% to 2%.
9.47am: Stocks open lower, manufacturing sector remains under pressure
US stocks have opened lower and the S&P PMI manufacturing index has fallen less than expected.
The FTSE 100, which was up 54 points just at the point when the Wall Street opening bell was still reverberating, has seen its gain cut to 25 points, a 0.3% increase on the day.
Meanwhile, the S&P 500 has dropped 0.8% and the tech-heavy Nasdaq has plunged over 1%, while the blue-chip Dow Jones is down 0.75%.
All the big three tech stocks are in the red, Apple Inc (NASDAQ:AAPL, ETR:APC) is down 2.4%, Microsoft Corp (NASDAQ:MSFT) (Microsoft Corp (NASDAQ:MSFT)) is down 1% and NVIDIA Corp (NASDAQ:NVDA, ETR:NVD) is down 0.3%.
Google owner Alphabet Inc (NASDAQ:GOOG), Meta Platforms Inc (NASDAQ:META, ETR:FB2A, SWX:FB) and Netflix Inc (NASDAQ:NFLX, ETR:NFC) are all up over 1% though.
As for the PMI manufacturing reading, it dropped to 47.3 from 47.9, but a fall to 47 was expected.
The rival ISM manufacturing, which is the more closely watched of the two, is due later.
8am: Flat start predicted for S&P and Nasdaq
Wall Street stocks look set for a mostly flat start as October trading begins on Tuesday, amid a mixed mood around global markets.
Futures for the S&P 500 are pointing to a small decline, while Nasdaq 100 futures are modestly higher, with Dow Jones futures down 0.2%.
This followed a positive finish to the last month yesterday, with all three indexes ending higher.
Over the course of September, the S&P 500 advanced 2% to a fresh all-time high, the Dow Jones gained 1.85%, the Nasdaq 100 gained 2.50% and the Nasdaq Composite 2.6%.
The economic data today includes US ISM manufacturing index and JOLTs job openings.