US equity indices turned lower on Tuesday after a holiday-shortened week, with Monday closed for a holiday, as continued gains in oil prices renewed concerns about near-term interest-rate increases. The Dow Jones Industrial fell 0.9% to 52,949 points, the S&P 500 dropped 0.4% to 7,688, and the Nasdaq 100 was 0.3% lower at 29,454. At the open, the Dow had been down 0.96%, the S&P 500 was 0.13% lower and the Nasdaq 100 was unchanged. Broker IG had earlier seen the Dow 0.8% lower at 53,013 after it had already given back part of Friday's recovery, and the Nasdaq 100 0.1% higher at 29,568 after modest pre-weekend gains driven by strong semiconductor stocks. Dow futures were 0.8% lower, S&P 500 futures were 0.3% lower and Nasdaq futures were unchanged. Gains in AI-linked stocks, mainly from the chip sector, were not enough to offset the broader weakness.
Partners Group said markets were probably in a digestion phase as central banks worldwide underwent a significant policy adjustment, adding that equities could give back some gains or at least consolidate.
Oil prices extended their rise. Brent crude for November delivery was above $98 a 159-liter barrel and later above $99, the highest since mid-July, leaving the $100 level within reach. WTI also rose. Traders cited attacks by Yemen's Houthi militia on Saudi Arabia, after which the Gulf region's largest oil producer halted output at some facilities near the Yemen border. Tensions around the Strait of Hormuz persisted, with hopes for a tanker corridor still offset by military risks. A trader said the market remained strongly driven by oil prices and interest rates, and that risk appetite would stay limited unless the Middle East situation calmed and energy prices fell.
Rate expectations also weighed. After a strong jobs report before the weekend, Friday's inflation data could further raise expectations for a US policy-rate increase next week. The European Central Bank's rate hike on Thursday was already widely seen as near certain, with experts expecting a 25-basis-point increase to 2.5%; focus would shift to signals on the further policy path.
Exxon Mobil and Chevron shares rose more than 1% in US premarket trading on the oil-price move.
The SMI remained under pressure in Zurich, falling 1.4% at one point and 1.3% to 14,094.20 points at 11:40. The SMIM was 0.6% higher at 3,081.94, while the SPI lost 0.9% to 19,881.15. Other European markets were also lower, though less sharply. Novartis was the main drag, down 9.8% and at one point more than 10% lower at 112.54 francs, extending Monday's 3.2% decline. The company's Del-desiran candidate for a rare muscle disease missed its primary endpoint in a phase-III trial. Vontobel called it a clear setback for the pipeline. On Monday, disappointing data for Pelacarsen had weighed on the shares by 3.2%. By market capitalization, Novartis was heading for its largest one-day loss on record, with about 24 billion francs of value erased, more than during the euro minimum-rate removal or the coronavirus crash. It was also the steepest decline since 2020.
Nestlé supported the SMI, rising 2.7%. In the index, 9 stocks gained against 11 losers.
Sandoz rose 2.0% after presenting new growth targets to 2030 and outlining further expansion of its biosimilar business. Oerlikon gained 0.4% after new mid-term targets; UBS was slightly positive, saying targets of more than 2 billion francs of revenue and an adjusted EBITDA margin above 20% by 2030 were slightly above market expectations but realistic. Ascom jumped 7.6% after a large order from Norway worth about 80 million francs over seven years; ZKB called it a major success. SoftwareOne rose 4.1% after Kepler Cheuvreux sharply raised its price target, saying the turnaround was clearly on track. Galderma gained 2.4% and Gurit 2.5% on positive analyst comments or price-target increases. Burkhalter fell 6.3%, giving back more than its previous day's gains, while VAT, Inficon and Comet were also under pressure.
Among new Swiss price targets, HSBC raised ABB to 84 francs from 82 francs with a Hold rating, and Barclays lifted Lonza to 730 francs from 680 francs with an Overweight rating.
