US equity markets were lower on Tuesday after the extended weekend, with Monday a US market holiday. Higher oil prices and renewed worries about near-term rate increases weighed on sentiment. At the open, the Dow Jones Industrial Average was down 0.96%, the S&P 500 was down 0.13% and the Nasdaq 100 was unchanged. Broker IG had earlier priced Dow futures 0.8% lower at 53,013 and Nasdaq 100 futures 0.1% higher at 29,568; Dow futures were also 0.8% lower, S&P 500 futures 0.3% lower and Nasdaq futures unchanged. After the first hour, the standard-value-heavy Dow had fallen 1.2% to 52,773, the broad S&P 500 was down 0.4% at 7,686 and the technology-heavy Nasdaq 100 was down 0.2% at 29,488. Earlier in the session, the Dow had been down 0.9% at 52,949, the S&P 500 down 0.4% at 7,688 and the Nasdaq 100 down 0.3% at 29,454. Gains in AI-linked stocks, again mostly from the chip sector, were not enough to offset the broader weakness.
The soft tone followed a strong US labor report released before the weekend, with Friday's inflation data seen as a further factor that could lift expectations for a US rate increase next week. A rate adjustment by the European Central Bank on Thursday was already viewed as almost certain. Anastasia Amoroso of Partners Group told Bloomberg TV that markets were likely in a digestion phase because central banks around the world were undergoing a significant policy adjustment, adding that equities could give back some gains or at least consolidate.
A barrel (159 liters) of Brent crude for November delivery was last above $98, close to the psychologically important $100 level, while WTI also gained. Traders cited attacks by Yemen's Houthi militia on Saudi Arabia; the Gulf region's largest oil producer stopped production at some facilities near the Yemen border. Chevron, ExxonMobil and ConocoPhillips benefited, with ExxonMobil and Chevron each rising more than 1% in premarket trading.
Chip stocks extended Friday's gains. Intel, ARM and Broadcom rose at least 2%, while Qualcomm jumped 5% after saying the handset-chip maker had entered a partnership with Amazon to supply custom data-center chips, along with options for a stock purchase. Bloom Energy, the fuel-cell developer, gained 8.4% ahead of its inclusion in the S&P 500. Boston Scientific fell 3% following a cyberattack.
Pharma was weak, with Dyne Therapeutics down 22% as its shares were dragged by negative news from Novartis; the two companies have comparable drug candidates. Novartis fell 9.8%, extending a 3.2% decline on Monday after disappointing data for the heart and circulation drug Pelacarsen, as its Del-desiran candidate for myotonic dystrophy missed a primary endpoint in a Phase III trial. Vontobel called the result a clear setback for the pipeline. Measured by market capitalization, the stock was heading toward its largest daily loss in its history.
The SMI remained near its session low, down 1.3% at 14,094.20, with Novartis the main drag. The SMIM was up 0.6% at 3,081.94, while the SPI fell 0.9% to 19,881.15. Other European markets were also lower, though less sharply than the Swiss benchmark. The SMI had earlier been down 1.4%.
