S&P 500, Dow, Nasdaq End Lower Amid Hormuz Uncertainty As Investors Await Jobs Data To Judge Fed Rate Course — SOUN, GOOGL, SPCX, NVDA In Focus

• The S&P 500 ended 0.2% lower, the Nasdaq 100 fell 0.5%, while the Dow Jones Industrial Average lost 0.8%.
• Michael Burry revealed short positions on Oracle and Nebius.
• Strait of Hormuz would supposedly ban U.S. and Israeli ships from moving through the key passageway, Iranian state news reported. 

US stock indices ended lower on Thursday as investors assessed developments in the Middle East while awaiting key jobs data due on Friday to assess the future interest rate course of the Federal Reserve. 

The S&P 500 ended 0.2% lower, the Nasdaq 100 fell 0.5%, while the Dow Jones Industrial Average lost 0.8%. The Russell 2000, which tracks stocks with small market capitalizations, fell 0.6%.

Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY) ended 0.3% lower, and Invesco QQQ Trust (QQQ) ended Thursday 0.4% lower, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) dropped 0.9%.

Oil prices and Treasury yields gained as uncertainty around the opening of the Strait of Hormuz deepened. The United States Oil Fund (USO) added about 4%. Meanwhile, strength in chipmakers helped curb some losses. 

The VanEck Semiconductor ETF (SMH) added 0.4% on support from Broadcom (AVGO), ASML Holdings (ASML) and Advanced Micro Devices (AMD), while the broader Vanguard Information Technology ETF (VGT) lost 0.2%.

Retail sentiment on Stocktwits for SPY and QQQ was ‘bearish’ and ‘neutral’ for the DIA, with ‘high’ message volumes.

US Market Drivers

Global oil prices jumped following reports from Iranian state news that a proposed regulation could restrict U.S. and Israeli vessels from navigating the crucial Strait of Hormuz. The potential shipping restrictions were originally disclosed by an Iranian lawmaker.

Brent crude, the international benchmark, rose 3.8% to close at $82.49 per barrel. U.S. West Texas Intermediate gained about 2.8% to settle at $77.29. 

Investors would now shift attention to incoming jobs data to gauge the timeline for a Fed rate hike as soaring oil prices fuel inflation concerns. Economists polled by Bloomberg estimate the monthly jobs report on Friday will show an 80,000 increase in payrolls after the lower-than-expected 57,000 gain in June.

Friday’s nonfarm payrolls data directly shapes Federal Reserve interest rate decisions, as strong numbers generally indicate a hot economy and provide room for the central bank to hike rates.  

“Friday’s jobs report is of greater importance for markets given how fast this stock market has rallied over the past week, and ultimately we will need to see a number that is not too hot and not too cold in order for the market to keep grinding higher,” Clark Bellin at Bellwether Wealth told Bloomberg in an interview.

Trending Stocks To Watch 

SoundHound AI (SOUN): The stock gained in midday trade on Thursday, on track to notch its biggest single-day gain in three months, despite Wall Street trimming its price target after the company’s second quarter results. 

Alphabet Inc. (GOOG, GOOGL): The stock edged lower after a report said the company is planning to raise as much as $25 billion from the debt market.

SpaceX (SPCX): Investors looked past the company’s first major IPO lock-up expiration, although analysts cautioned that the sharp increase in tradable shares could keep the stock volatile in the near term. 

Nvidia Corp. (NVDA): The chipmaker is reportedly testing multiple versions of its next-generation Rubin Ultra graphics processing unit (GPU).

OpenAI: ChatGPT has officially crossed the threshold of one billion weekly active users. 

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