Nasdaq 100 and S&P 500: Geopolitical Tensions and Jobs Data Set the Stage for Volatility

U.S. Stock Markets Await Non-Farm Payrolls Amid Geopolitical Uncertainty

The major U.S. stock indexes are slightly higher on Friday as traders await the release of the highly anticipated U.S. Non-Farm Payrolls (NFP) report.

Scheduled for 12:30 GMT, this report is expected to influence market sentiment as economists forecast an addition of 150,000 jobs for September, up from August’s 142,000. However, most analysts believe market movement will only be significant if the actual figure deviates sharply from expectations.

Barbara Doran, founder of BD8 Capital Partners, suggests that while the NFP number is critical, it may not significantly impact market trends unless it is substantially weaker than expected. This cautious outlook reflects broader concerns about geopolitical instability and its potential effects on equity markets.

Geopolitical Tensions Weigh on Market Sentiment

Mounting geopolitical risks, particularly in the Middle East, have put pressure on U.S. equities, contributing to a volatile start to October. Iran’s missile attack on Israel has added to market anxieties, pushing crude oil prices higher. On Friday, crude oil rose another 1.6%, following a 5% surge the previous day. The energy sector has benefitted from this rally, with the S&P 500 Energy Sector gaining 5.9% for the week—its best weekly performance in over a year.

Despite this, the broader market remains under pressure. The S&P 500 and Dow are both down 0.7% week-to-date, while the Nasdaq has lost 1.1% over the same period. All three indexes are on pace to snap a three-week winning streak, reflecting investor uncertainty in light of the ongoing geopolitical and macroeconomic headwinds.

Positive News from Labor Strike Resolution

Amid the uncertainty, there was a piece of good news for the U.S. economy. The longshoremen’s port strike, which began earlier this week, ended on Thursday night after a tentative wage agreement was reached between the International Longshoremen’s Association and the United States Maritime Alliance. The two parties also extended their existing contract until January 2025 to allow time for further negotiations, avoiding further disruptions in critical supply chains.

Spirit Airlines Faces Financial Turbulence

In corporate news, Spirit Airlines saw its stock plummet 24% in after-hours trading on Thursday following reports that the company is considering Chapter 11 bankruptcy. The Wall Street Journal, citing anonymous sources, reported that Spirit is in talks with bondholders as it struggles to reorganize its finances. The budget airline has faced significant challenges in 2024, with its stock down over 86% year-to-date, following a failed merger with JetBlue Airways in March.

Market Forecast

Heading into the weekend, traders are closely watching the outcome of the September NFP report. If the data meets or exceeds expectations, the market could see a short-term rally, particularly in sectors that have been under pressure.

However, downside risks remain due to the ongoing geopolitical instability and weak technical momentum in the S&P 500. If the index fails to maintain support near its 50-day moving average at 5628.14, a further decline is possible, with a potential test of lower levels. Conversely, a breakout above 5830.00 could signal renewed bullish momentum.