U.S. stocks opened lower on Tuesday following the long weekend, with rising oil prices fueling concerns about further interest-rate hikes. Gains in AI-related chip names were insufficient to offset the broad selloff.
The Dow Jones Industrial Average fell 0.9% to 52,949 points, while the S&P 500 dropped 0.4% to 7,688. The technology-heavy Nasdaq 100 declined 0.3% to 29,454.
Pre-market futures pointed to a wider gap: the Dow Jones futures traded 0.8% lower at 53,013, the S&P 500 futures were down 0.3%, and Nasdaq futures were flat.
"Markets are likely in a kind of digestion phase as we navigate a significant global adjustment in central-bank policy," said Anastasia Amoroso of Swiss asset manager Partners Group, speaking on Bloomberg TV. "Stocks could give back some of their earlier gains or at least face consolidation."
Oil prices mounted further gains. Brent crude for November delivery rose above $98 a barrel, approaching the psychologically key $100 level — the highest since mid-July. U.S. benchmark WTI also climbed sharply.
Traders pointed to Houthi militia attacks on Saudi Arabia, which halted production at some facilities near the Yemen border. Tensions around the Strait of Hormuz persisted, with hopes for a tanker corridor clashing with ongoing military risks.
A trader noted that markets remain heavily driven by oil prices and rates, and until the Middle East situation stabilizes and energy costs ease, risk appetite will stay limited.
Investors are watching closely for U.S. inflation data due Friday, which could reinforce expectations for a rate hike next week. The European Central Bank is widely expected to raise rates by 25 basis points to 2.5% on Thursday, with attention focused on signals about the future monetary-policy path.
U.S. energy majors Exxon Mobil and Chevron rose more than 1% in pre-market trading ahead of the oil-price surge.
Switzerland's SMI index fell 1.4%, dragged by Novartis, which plummeted nearly 10% after its experimental drug del-desiran failed to meet its primary endpoint in a Phase III trial for a rare muscle disease. The stock had already dropped 3.2% on Monday following disappointing data for another pipeline candidate, pelacarsen. By midday, Novartis was down 9.8%, erasing roughly CHF 24 billion in market value — potentially the largest single-day loss in the company's history, surpassing drops after the 2015 euro-floor abandonment and the 2020 pandemic crash. The stock briefly fell more than 10% to CHF 112.54 around 9:45 a.m., the steepest decline since 2020.
The broader SMI index stood 1.3% lower at 14,094.20 points. The mid-cap SMIM index held up better at +0.6% to 3,081.94, while the SPI fell 0.9% to 19,881.15. Other European bourses also dipped, though less sharply than the SMI.
Among SMI gainers, Nestlé rose 2.7% as a counterweight. Sandoz gained 2.0% after presenting new growth targets through 2030 and pledging to expand its biosimilars business. Oerlikon added 0.4%, with UBS noting its revised figures — over CHF 2 billion in revenue and a adjusted EBITDA margin above 20% by 2030 — slightly exceeded market expectations but remained realistic. Ascom surged 7.6% on a seven-year, CHF 80 million contract from Norway. SoftwareOne climbed 4.1% following a marked target-price increase by Kepler Cheuvreux. Galderma rose 2.4% and Gurit gained 2.5%, both buoyed by positive analyst commentary.
On the losing side, Burkhalter fell 6.3%, giving back most of its previous day's gains, while tech names including VAT, Inficon and Comet faced above-average pressure.
