MARKET SNAPSHOT

Markets calmed down as investors' focus turned back to the U.S. economy from the conflict in the Middle East. While oil prices closed at their highest in two weeks, moves in major indexes were relatively muted. Treasury yields continued higher amid lingering inflation concerns and after a private-sector hiring report showed U.S. businesses added more jobs than expected. The dollar strengthened against its rivals. Gold fell for the third time in four sessions.

MARKET WRAPS

EQUITIES

U.S. stocks wavered as investors received a bit of good economic news this morning. ADP data showed the U.S. private sector added 143,000 jobs in September, ending five straight months of slowdown and beating economists' forecasts.

The S&P 500, the Nasdaq Composite and the Dow Jones Industrial Average gained 0.1% or less.

To some investors, the recent data is a sign that concerns about an imminent downturn are overblown.

Earlier Wednesday, Hong Kong's equity market advanced to the sixth consecutive session amid risk-on sentiment as the rally ignited by Beijing's raft of stimulus measures continued to lift Chinese stocks. With mainland China markets closed for the Golden Week holiday, all the focus was on Hong Kong, which returned after a day's break on Tuesday.

The Hang Seng Index jumped 6.2%, taking its gains over the past 13 trading sessions to 31% and leaving the benchmark at its best level since the end of January 2023.

Japan's Nikkei Stock Average fell 2.2%. Geopolitical developments have jolted risk sentiment, sparking a rush into safe havens, said Michael Brown, senior research strategist at Pepperstone.

Australia's S&P/ASX 200 closed 0.1% lower, extending the pull-back from its recent record high amid weakness in bank and travel-related stocks.

New Zealand's NZX-50 lost 0.1%, resuming its recent decline on further weakness in real estate and aged-care stocks.

COMMODITIES

Oil futures settled at their highest in two weeks, modestly extending a rally from a day earlier, amid fears of a wider conflict in the Middle East that could impede flows of crude from the region.

Prices pared much of their earlier gains as those worries appeared to fade a bit, while the U.S. government reported a weekly climb in domestic crude stockpiles for the first time in three weeks.

West Texas Intermediate crude for November delivery rose 0.4% to settle at $70.10 a barrel on the New York Mercantile Exchange. December Brent crude climbed 0.5% to $73.90 a barrel on ICE Futures Europe.

"It is all about Middle East conflict now when it comes to oil prices," said Fawad Razaqzada, market analyst at City Index and Forex.com. "Crude oil could rise another $5 in the next few days if we see further escalation in the conflict."

Gold futures fell for the third time in the past four sessions. Front month Comex gold for October delivery lost 0.8% to settle at $2647.10 per troy ounce.

TODAY'S TOP HEADLINES

Fed's Barkin Sees More Work to Do on Inflation

Progress on slowing price growth-after two years of 20-year high interest rates and easing supply-chain snags-justifies Federal Reserve rate decreases, but the inflation beast isn't slain yet, according to Thomas Barkin. The central bank's September jumbo rate cut was about adjusting to today's economic backdrop-not a signal of panic about a faltering economy, the Federal Reserve Bank of Richmond President said Wednesday.

"This dial-back in restraint just takes a little bit of the edge off," Barkin said in prepared remarks at the 2024 University of North Carolina Wilmington Economic Outlook Conference in Wilmington, N.C. on Wednesday.

The Federal Open Market Committee, the Fed's policymaking body, voted on Sept. 18 to lower its federal-funds target by a half percentage point, to a range of 4.75% to 5.0%. Barkin has served as president of the Richmond Fed since 2018 and is a voting member of the FOMC this year.

ADP jobs report shows 143,000 gain. Cooling U.S. labor market leads to slower wage increases.

The numbers: U.S. businesses added a higher-than-expected 143,000 new jobs in September, paycheck company ADP said. Yet it was the sixth straight month in which employment gains totaled less than 200,000 in a sign the labor market has cooled off considerably.

A chillier labor market has overtaken inflation as the Federal Reserve's chief worry. The Fed cut interest rates two weeks ago with inflation slowing and the bank vowed to make more reductions to ensure the labor market doesn't deteriorate much further.

Economists polled by the Wall Street Journal had forecast a gain of 128,000 new jobs in the ADP's September survey.

Saudi Minister Warns of $50 Oil as OPEC+ Members Flout Production Curbs

The Saudi oil minister has said prices could drop to as low as $50 per barrel if so-called cheaters within OPEC+ don't stick to agreed-upon production limits, according to delegates in the cartel.

The remarks were interpreted by other producers as a veiled threat from the kingdom that it is willing to launch a price war to keep its market share if other countries don't abide by the group's agreements, they said.

Key members of an alliance made of the Organization of the Petroleum Exporting Countries and its allies, together known as OPEC+, agreed on Wednesday to ease production curbs in December. Those plans, which were previously agreed upon, were confirmed in an online meeting.

Levi Cuts Revenue Outlook, Mulls Sale of Dockers Brand

Levi Strauss cut its revenue outlook for the year and is once again exploring the potential sale of Dockers, the latest move by Chief Executive Michelle Gass to center the company on its namesake brand.

Since taking the job in January, Gass has exited its Denizen fashion line and closed a footwear business in Europe, while focusing more on its Levi's brand, whose 5% growth in the latest quarter was offset by declines elsewhere. The company has launched a marketing campaign around the storied denim brand with the pop star Beyoncé and is also rolling out more new products.

Looking ahead, Gass said, "we will amplify our focus on the Levi's brand."

OpenAI Nearly Doubles Valuation to $157 Billion in Funding Round

OpenAI has raised $6.6 billion in new funding, capping a complex fundraising process that involved negotiations with multiple tech giants and large private investors at the same time it has been experiencing disruptive internal turmoil.

Investors are valuing the startup behind ChatGPT at $157 billion, a total that puts it on par with the market capitalizations of publicly traded household names such as Goldman Sachs Group, Uber Technologies and AT&T.

OpenAI was last valued at $86 billion early this year, when employees sold existing shares.