Futures Decline, Tesla Deliveries, Levi Strauss Shares Drop – Market Movers Update

US stock futures indicated a downward trend ahead of an important release of economic data on Thursday. Investors approached the previous session with caution, influenced by concerns over Israel’s potential retaliation in response to an Iranian attack earlier this week. Additionally, Tesla’s quarterly delivery figures fell short of expectations, and Levi Strauss announced that it is considering options for its underperforming Dockers brand.

1. Futures Decline

On Thursday, US stock futures saw a slight decline as investors prepared for the release of a significant jobs report later this week, coupled with ongoing tensions in the Middle East.

By 03:33 ET, the Dow futures contract dropped by 111 points or 0.3%, the S&P 500 futures decreased by 16 points or 0.3%, and the Nasdaq 100 futures fell by 94 points or 0.5%.

The leading indices experienced minimal movement during the previous session, as traders remained cautious amid Israel’s deliberations regarding a response to an aerial assault from Iran earlier in the week. The S&P 500 finished slightly higher by 0.79 points, while the Nasdaq Composite rose by 15 points, and the Dow Jones Industrial Average gained 40 points.

US Treasury yields, which generally move in the opposite direction to prices, edged up following a stronger-than-expected private payrolls report.

2. Jobless Claims and PMIs on the Horizon

Markets are set to analyze new weekly claims for unemployment benefits as well as data on service sector activity on Thursday.

These figures will pave the way for the crucial nonfarm payrolls report on Friday, which is expected to show a slight increase in American jobs for September.

Investors will likely use this collection of data to evaluate the state of the US labor market and the overall economy ahead of the Federal Reserve’s upcoming policy meeting in November.

The central bank recently cut interest rates by a substantial 50 basis points, indicating their intent to support labor demand during a period of decreasing inflationary pressures. Policymakers signaled the start of a broader easing cycle, although it remains uncertain whether the Fed will implement another large cut or a more traditional quarter-point reduction next month.

3. Tesla Shares Fall Following Disappointing Deliveries

Tesla’s shares dropped over 3% on Wednesday after the electric vehicle manufacturer reported disappointing third-quarter deliveries, despite efforts to reduce prices and provide new incentives for customers.

The company delivered 462,890 vehicles from July to September, marking a 6.4% year-over-year increase but falling short of Wall Street’s expectations of 469,828 units.

CEO Elon Musk has stated that Tesla aims to increase its annual deliveries from an all-time high of 1.8 million last year. However, with the current pace, the company would need to achieve record deliveries in the fourth quarter to maintain full-year growth.

Shares in Tesla had been buoyed recently as investors anticipated the unveiling of the company’s new robotaxi on Oct. 10, with high hopes that it would represent a shift towards artificial intelligence-driven autonomous driving. Earlier this year, Musk proclaimed that Tesla had transformed into "an AI and robotics" business.

4. Levi Strauss Evaluating Dockers Brand Sale

Levi Strauss announced that it is reviewing its Dockers brand for a potential sale and has decreased its overall revenue forecast for the year, causing shares to plummet in after-hours trading.

The San Francisco-based company stated that it is evaluating "strategic alternatives" for Dockers to address areas of underperformance.

Introduced in 1986, Dockers has become synonymous with business casual attire but has faced challenges recently, experiencing a 15% drop in net revenue year-over-year in the third quarter ending in August.

Levi Strauss has also adjusted its annual sales forecast, now anticipating revenue growth of 1%, down from a previous estimate of 1% to 3%.

5. Oil Prices Rise Amid Middle East Tensions

Oil prices rose on Thursday as escalating violence in the Middle East raised concerns regarding potential disruptions to crude supply from this critical exporting region.

By 03:34 ET, Brent crude had increased by 1.2% to $74.81 per barrel, while U.S. crude (WTI) futures traded 1.4% higher at $71.06 per barrel.

Traders are awaiting Israel’s response to Iran’s launch of over 180 missiles into its territory, with analysts suggesting potential targeting of Iranian oil infrastructure.

Additionally, U.S. crude inventories rose by 3.9 million barrels to a total of 417 million barrels for the week ending Sept. 27, according to the Energy Information Administration, contrasting with expectations of a 1.3 million-barrel draw.