US open: Stocks lower as Middle East tensions weigh on sentiment

(Sharecast News) - Major indices were mixed early on Wednesday as Middle East developments remained in focus following yesterday's fresh record close.

As of 1515 BST, the Dow Jones Industrial Average was down 0.61% at 50,993.01, while the S&P 500 shed 0.33% to 7,584.79 and the Nasdaq Composite came out of the gate 0.37% softer at 26,992.48.

The Dow opened 314.78 points lower on Wednesday, more than reversing gains recorded in the previous session.

Stocks were lower at the open after geopolitical tensions in the Middle East flared again, after Kuwait's army said late on Tuesday that its air‑defence systems were intercepting "hostile targets".

Hours later, US Central Command confirmed that American forces had shot down Iranian ballistic missiles and drones and carried out "self‑defence strikes" on Qeshm Island in response to attempted attacks across the region. Donald Trump also claimed that Tehran had agreed to not have nuclear weapons, but added "they can change their mind".

Oil traded higher in early action, with West Texas Intermediate up 0.91% at $94.61 per barrel, while US Treasury yields also advanced, with the benchmark 10-year not last seen at almost 4.5%, while the 30-year yield was nearing 5%.

On the macro front, US mortgage applications fell for a third consecutive week at the end of May, according to the Mortgage Bankers Association, with overall volumes down 2.5%. The decline followed an 8.5% drop in the prior week and came despite a slight easing in benchmark mortgage rates, which tracked lower long‑term Treasury yields as energy prices pulled back from recent highs. Applications to refinance a mortgage, which are typically more sensitive to short‑term interest rate changes, slipped 2.3% after an 18% plunge in the previous period, while applications to purchases a home were also weaker, easing 2.9% on the week.

Elsewhere, private sector employment in the US rose more than expected in May, according to figures released on Wednesday by ADP. Employment rose by 122,000 from April, versus expectations for a 110,000 increase. Meanwhile, the figure for April was revised to 105,000 jobs added, from 109,000. Small businesses with fewer than 50 employees added 67,000 jobs while medium businesses with between 50 and 499 employees added 17,000. Large business with more than 500 employees created an additional 40,000 jobs. The service sector added 114,000 jobs, while the goods-producing sector saw an 8,000 increase. Year-on-year pay growth for job-stayers was steady at 4.4%, while for job-changers, it eased to 6.5% in May from 6.6% the month before.

On another note, US services activity slowed to a near‑stall in May, according to the latest S&P Global purchasing managers index, which pointed to only marginal growth across the private‑sector economy as rising fuel and energy costs continued to squeeze demand. The headline US services PMI slipped to 50.7 from 51.0 in April, remaining just above the 50 no‑change mark but signalling one of the weakest expansions in more than two years. Softer activity was linked to higher operating costs and subdued new‑business inflows, with firms reporting that rising prices were constraining client budgets. As a result, S&P Global's composite PMI decreased to 51.50 points in May, down from 51.70 points in April.

On the other hand, the Institute for Supply Management's services PMI rose to 54.5 from 53.6 in April - marking a 23rd straight month of growth. Business activity strengthened, with the index climbing to 57.7, while new orders accelerated sharply to 57.3, well above both April's reading and the 12‑month average. Employment, on the other hand, remained a weak spot, with the jobs index contracting for a third consecutive month, edging down to 47.9 to be the only major component sitting below its 12‑month trend. Supplier deliveries continued to lengthen, now sitting at 55.2, pointing to slower delivery times for the 18th month in a row. Price pressures remained elevated, with the prices‑paid index rising to 71.3, its highest since August 2022, with respondents again citing higher diesel, gasoline and oil costs. Inventories jumped to 62.5, matching a record high, while inventory sentiment remained firmly in expansion territory.

Finally, US factory orders rose for the fifth time in six months in April, climbing 4.8% to $662.7bn, according to the Census Bureau, following a 1.8% increase in March. Shipments were also higher, up 1% month-on-month to $641bn after a 1.5% rise previously. Unfilled orders continued their long run of gains, increasing 1.7% to $1.57trn - the 21st rise in the past 22 months - pushing the unfilled‑orders‑to‑shipments ratio up to 6.95 from 6.88. Inventories rose for a seventh straight month, edging 0.3% higher to $959.1bn, though the inventories‑to‑shipments ratio dipped slightly to 1.50 from 1.51 in March.

In the corporate space, retailer Macy's posted its strongest first quarter growth in four years, leading the firm to raise its FY guidance despite ongoing consumer fears. Macy's said like-for-like sales grew 3% overall during Q1 and 1.6% at its namesake banner. At Bloomingdale's, comparable sales grew 10.2%.

Broadcom and CrowdStrike will report earnings after the close.

Reporting by Iain Gilbert at Sharecast.com

Dow Jones - Risers

Intel Corp. (INTC) $113.95 7.34%

Unitedhealth Group Inc. (UNH) $386.92 2.39%

Apple Inc. (AAPL) $314.36 2.19%

Dow Chemical Co. (DOW) $35.27 1.64%

Caterpillar Inc. (CAT) $922.44 1.50%

Amgen Inc. (AMGN) $331.29 1.46%

Merck & Co. Inc. (MRK) $116.93 1.21%

Procter & Gamble Co. (PG) $142.42 1.14%

Chevron Corp. (CVX) $189.82 1.03%

Travelers Company Inc. (TRV) $294.60 0.86%

Dow Jones - Fallers

International Business Machines Corporation (CDI) (IBM) $305.77 -7.32%

Salesforce.Com Inc. (CRM) $192.56 -4.12%

Microsoft Corp. (MSFT) $431.39 -3.84%

Goldman Sachs Group Inc. (GS) $1,042.53 -2.44%

Verizon Communications Inc. (VZ) $46.99 -1.83%

Visa Inc. (V) $311.59 -1.68%

American Express Co. (AXP) $307.00 -1.32%

Boeing Co. (BA) $215.68 -0.85%

McDonald's Corp. (MCD) $275.05 -0.58%

Walt Disney Co. (DIS) $100.87 -0.53%

S&P 500 - Risers

Ipg Photonics Corp. (IPGP) $130.05 9.16%

Intel Corp. (INTC) $113.95 7.34%

Carmax Inc. (KMX) $46.91 7.08%

QUALCOMM Inc. (QCOM) $245.44 6.01%

Western Digital Corp. (WDC) $581.59 5.50%

Borg Warner Inc. (BWA) $78.11 5.43%

Medtronic Plc (MDT) $77.46 4.87%

Fastenal Co. (FAST) $46.13 4.80%

Advanced Micro Devices Inc. (AMD) $531.42 4.60%

Applied Materials Inc. (AMAT) $493.19 4.40%

S&P 500 - Fallers

Coterra Energy Inc. (CTRA) $32.56 -8.62%

Global Payments Inc. (GPN) $67.56 -8.36%

International Business Machines Corporation (CDI) (IBM) $305.77 -6.95%

Nektar Therapeutics (NKTR) $58.62 -6.42%

Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $462.78 -6.17%

Dxc Technology Company (DXC) $9.41 -5.90%

American Airlines Group (AAL) $13.56 -5.86%

Hewlett Packard Enterprise (HPE) $53.38 -5.56%

Oracle Corp. (ORCL) $232.00 -5.18%

Nasdaq Inc (NDAQ) $87.62 -4.75%

Nasdaq 100 - Risers

Intel Corp. (INTC) $113.95 7.34%

QUALCOMM Inc. (QCOM) $245.44 6.24%

Western Digital Corp. (WDC) $581.59 5.50%

Fastenal Co. (FAST) $46.13 4.80%

Applied Materials Inc. (AMAT) $493.19 4.40%

KLA-Tencor Corp. (KLAC) $2,049.86 4.12%

Lam Research Corp. (LRCX) $336.17 3.61%

PACCAR Inc. (PCAR) $115.03 3.40%

Skyworks Solutions Inc. (SWKS) $78.50 2.39%

Cintas Corp. (CTAS) $173.88 2.35%

Nasdaq 100 - Fallers

Qvc Group Inc Series A (QVCGA) $0.34 -13.49%

Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $462.78 -6.17%

American Airlines Group (AAL) $13.56 -5.86%

Adobe Systems Inc. (ADBE) $253.61 -4.51%

Autodesk Inc. (ADSK) $228.90 -4.50%

Netflix Inc. (NFLX) $82.26 -4.27%

Mercadolibre Inc. (MELI) $1,652.99 -4.06%

Workday, Inc. (WDAY) $144.26 -3.98%

Intuit Inc. (INTU) $312.08 -3.87%

Microsoft Corp. (MSFT) $431.39 -3.84%