NASDAQ 100, Dow Jones, S&P 500 News: Market Braces for Jobs Data Amid Clorox Slide, Energy Plunge

Highlights

• Dow Jones futures and S&P 500 point to a subdued start, shedding 0.43% ahead of crucial jobs data.
• Clorox’s post-bell guidance rattles investors, forecasting an adjusted loss far below expectations.
• WTI crude oil lower after recording its worst daily performance since September 2022.
• Yield curve’s persistent inversion raises eyebrows, though signs of steepening add nuance.

U.S. Stock Futures Dip, Clorox Guidance and Energy Sector Underwhelm

U.S. stock futures pointed to a subdued start for Wall Street on Thursday, falling slightly ahead of key employment data. At 09:30 GMT, Dow Jones futures were down by 144 points, or a 0.43% decline,  while S&P 500 and Nasdaq 100 futures also dropped 0.43% and 0.40%, respectively. The tepid sentiment comes on the back of Clorox’s post-bell 3% stock slide, as the consumer goods company released a bleak Q1 fiscal outlook, far below the analyst consensus.

Market Performance and Sector Watch

Despite the sluggish futures, U.S. equities found some relief in Wednesday’s trading. The S&P 500 rose by 0.81%, and the Dow added 0.39%, breaking a three-day losing streak. Nasdaq outperformed both, surging by 1.35%. Meanwhile, West Texas Intermediate crude futures plunged 5.61% to $84.22 a barrel, marking its worst performance since September 2022. Devon Energy led the losses in the energy sector, falling 5.25%.

Jobs Data and Treasury Yields

Wall Street’s focus is on labor market indicators, with ADP’s job growth report coming in well below Dow Jones’ estimate, at 89,000 for September against the expected 160,000. This softer data has eased some inflationary concerns, possibly slowing down the Fed’s rate-hiking agenda started in March 2022. The 10-year Treasury note saw its yield retreat, lifting equities, as investors anticipate the labor market loosening up.

Yield Curve and Recession Fears

Concerns around the yield curve persist as the spread between 2-year and 10-year Treasury yields sits at around 31 basis points. The yield curve has been inverted since March 2022, a traditional warning sign of a looming recession. However, recent data shows the curve beginning to steepen, adding another layer of complexity to market sentiment.

Short-term Outlook: Guardedly Bearish

In the short term, the market is showing signs of cautious pessimism. Despite a slight uptick in equities, concerns around corporate earnings, labor market tightening, and recession indicators continue to hover. Investors should keep a close eye on the upcoming jobs data for further market direction.

Technical Analysis

The Daily S&P 500 Index currently sits at 4263.76, narrowly above its minor support level of 4263.76 and significantly above its main support at 4197.68. Despite this, the index is trading below both its 50-Day and 200-Day moving averages, at 4435.16 and 4203.82 respectively, signaling a bearish trend.

The index’s proximity to the trend line support of 4299.41 suggests potential vulnerability to a downside acceleration.

With minor resistance at 4327.18 and main resistance considerably higher at 4448.58, the current market sentiment leans bearish, especially given the index’s underperformance relative to its moving averages and uptrend line.