Nasdaq 100 and US Stocks: Energy Stocks Surge, Tech Faces Headwinds Ahead of Key Jobs Data

Stock Futures Decline as Middle East Tensions and Jobs Data Loom

Stock futures slipped on Thursday as traders remain cautious ahead of September’s payroll report, which could provide critical insight into the U.S. labor market. Geopolitical tensions in the Middle East are also weighing on investor sentiment, as Iran’s missile attack on Israel and the potential for a ground operation in Lebanon spark fears of further instability. The major U.S. indices are now on track for weekly losses as October’s volatility continues.

The Nasdaq Composite has been hit the hardest, down more than 1% for the week, while the S&P 500 and Dow Jones Industrial Average have lost 0.5% and 0.3%, respectively.

Levi Strauss Plummets After Weak Earnings, Dockers Drag

Levi Strauss saw its shares plunge 10% in after-hours trading following a mixed fiscal third-quarter report and news that it may sell its Dockers brand. The company posted adjusted earnings of 33 cents per share on $1.52 billion in revenue, narrowly beating earnings expectations but missing the $1.55 billion revenue forecast. Levi’s also trimmed its full-year guidance, reflecting struggles with Dockers, which saw a 15% sales drop. While Levi’s brand grew 5% during the quarter, stagnant overall sales have shaken investor confidence.

Tech Stocks Mixed: Nvidia Rises, Wolfspeed Slumps

The tech sector continues to show mixed results this week, with Nvidia gaining over 1% following comments from CEO Jensen Huang about “insane” demand for the company’s next-generation AI graphics processor, Blackwell. Scheduled to ship in Q4, the strong demand for Blackwell has been a bright spot in the AI chip giant’s outlook.

In contrast, Wolfspeed shares dropped nearly 5% after Mizuho downgraded the stock to “underperform” from “neutral,” citing concerns over pricing pressures in the silicon carbide market. Mizuho expects silicon carbide pricing, a key material in electric vehicle (EV) semiconductors, to decline 10% to 20% year-over-year by 2025. The firm also pointed to lower EV production expectations for the second half of this year and into next year as further headwinds for Wolfspeed.

Energy Stocks Surge as Oil Prices Climb

Energy stocks have outperformed, benefiting from rising oil prices driven by Middle East tensions. The Energy Select Sector SPDR Fund (XLE) is up more than 4% for the week, on track for its best week since January. Diamondback Energy and Marathon Oil have led the charge, gaining 6% and 5.5%, respectively. U.S. crude oil futures rose another 1.5% Thursday, pushing the weekly gain to 4.6%, as supply concerns mount amid the geopolitical unrest.

Labor Market Data in Focus Ahead of Payrolls Report

Wall Street’s focus is also shifting toward upcoming labor market data, with Thursday’s jobless claims and Friday’s payroll report being pivotal. Analysts are looking for signs of labor market weakness that could push the Federal Reserve to continue its rate-cutting cycle. The September payroll report will likely set the                                                        tone for trading, as stronger labor data could temper the Fed’s pace of rate cuts, potentially weighing on the markets.

Market Outlook: Caution Ahead of Key Data

In the short term, the market is expected to remain volatile, with tech stocks likely to stay under pressure amid rising rates and mixed earnings. Energy stocks may continue to provide support as oil prices rise, but much will depend on Friday’s jobs report. A weaker-than-expected labor market could trigger more aggressive rate cuts, providing a short-term boost to equities. Conversely, stronger data could reinforce the Fed’s cautious approach, putting further downward pressure on stocks. Traders should prepare for continued volatility, particularly in tech and energy sectors, as geopolitical risks and economic data unfold.