Big Things Happening This Week

• A bad start to October and Q4. All major indexes were in the red on Tuesday after Iran fired over 100 ballistic missiles at Israel. The Dow ended lower while the S&P 500 and the NASDAQ suffered their worst day in nearly a month.
• Oil prices skyrocketed. The attack on Israel pushed oil prices for West Texas Intermediate and Brent to their biggest increases in almost a year.
• The "Fear Gauge" has spiked. The Cboe Volatility Index, also known as Wall Street’s "fear gauge," spiked to a session high of 20.73 before settling below 20.
• Treasury yields dropped. Tuesday's rally in U.S. government debt, fueled in part by the escalating conflict in the Middle East, pushed yields on 10- and 30-year Treasurys to the lowest closing levels in a week or more.
• Important data this week. New jobs and manufacturing data kicked off the new quarter. Job openings surprisingly increased in August. New data showed there were 8.04 million jobs open at the end of August, an increase from the 7.71 million seen in July. US manufacturing held steady in September. The Institute for Supply Management (ISM) said its manufacturing PMI was unchanged at 47.2 last month. Despite holding steady, the reading still came in weak, as a PMI below 50 indicates a contraction in the manufacturing sector.
• Interest rate cuts may be slower than expected. Fed Chair Jerome Powell hinted the central bank is not in a rush to rapidly cut rates.
• A look towards Friday. Friday's September jobs report is the highlight in a week full of closely watched economic data. Investors are watching for confirmation that the US economy is cooling, rather than crumbling.
• Strikes begin at the docks. A strike by dockworkers began on the East and Gulf coasts, threatening to halt the flow of half the US's ocean shipping. Disruption from the large-scale stoppage could cost the economy billions of dollars a day, stoke inflation, put jobs at risk, and reverberate through US politics.
• Nike shares drop after Q1 report. Shares dropped around 2% in after-hours trading on Tuesday after the company beat expectations but saw revenue fall short.
• Super Micro Computer shares fell. SMCI fell more than 3% on Tuesday after the company underwent a 10-for-1 stock split after the market close on Monday.

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"Much remains uncertain" in response to Tuesday's spike in oil prices. A key issue will be the attack's "size and whether it inflicts significant damage, particularly in civilian areas. A major escalation by Iran risks bringing the US into the war, which Tehran will presumably seek to avoid." 

- James Reilly, senior markets economist at Capital Economics

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In the Spotlight

Samsung is Slashing Thousands of Jobs 

Samsung Electronics Co. is laying off workers in Southeast Asia, Australia and New Zealand as part of a plan to reduce global headcount by thousands of jobs, according to sources familiar with the situation. The layoffs could affect about 10% of the workforces in those markets, although the numbers for each subsidiary may vary, said an unidentified source. “Some overseas subsidiaries are conducting routine workforce adjustments to improve operational efficiency,” a Samsung spokesperson said. “The company has not set a target number for any particular positions.”

CVS is Reportedly Weighing a Breakup 

Drugstore chain CVS Health Corp. in recent weeks has been reviewing its options as a company — among them a potential breakup said the Wall Street Journal on Monday. CVS's stock rose to $64 per share on the news of the breakup late Monday after trading down 12% in the past year. It was trading at $61 per share on Tuesday.