Investors faced a tense week, concerned about the intensifying conflicts in the Middle East. Despite the uncertainty, a positive turn came on Friday with a strong jobs report, which reignited investor confidence and led to a recovery in the US markets. This resulted in the best day for the markets in over two weeks, helping offset some earlier losses. However, despite the late boost, the S&P 500 and Nasdaq indices still ended the week down by 1.1% and 1.5%, respectively.
During the summer, a series of three weak nonfarm payrolls reports raised concerns about a potential economic slowdown in the US, hinting at the possibility of a recession. However, the September report presented a more positive outlook, showing that 254,000 jobs were added—significantly higher than the anticipated 150,000. This boost in employment indicated that the job market remains robust.
Average hourly earnings saw a 4.0% increase compared to the previous year, further highlighting the strength of the labour market. The hospitality sector, including restaurants and bars, led job creation, followed by government, social assistance, and construction.
Among the week’s major stock movements, Tesla experienced a sharp drop, falling more than 3% on consecutive days. This decline came after the company announced its third-quarter vehicle deliveries, which fell short of analysts’ expectations. Tesla delivered 462,890 vehicles worldwide, marking a 6.4% increase from the previous year. However, lower demand in Europe contributed to investor disappointment. As the largest electric vehicle manufacturer, Tesla is also facing growing competition from Chinese companies such as BYD and Geely.
The drop in Tesla’s share price affected the wealth of Elon Musk, Tesla’s largest shareholder with a nearly 13% stake. Musk, the world’s richest person, saw his wealth dented, while Mark Zuckerberg moved past Jeff Bezos to become the world’s second-richest person, trailing Musk by around $50 billion.
Zuckerberg’s wealth has surged by nearly $80 billion this year, driven by a 65% rise in Meta Platforms’ share price. Meta, the parent company of Facebook, saw its shares reach a new high of $595 on Friday. Investors remain optimistic about Meta’s artificial intelligence capabilities and its strong performance in online advertising. The company has also benefited from significant cost-cutting efforts over the past two years, which have reduced its workforce by 25%.
In the UK, Tesco’s shares rose 3% on Thursday after it raised its profit forecast for the year to £2.9 billion. As the UK’s largest supermarket, Tesco holds a 28% share of the grocery market. The company noted that consumer sentiment remains relatively strong, with shoppers willing to spend more as inflation eases and employment remains stable.
Meanwhile, Rio Tinto, another FTSE 100 company, had a strong week, with its shares gaining 11%. This was driven by expectations that Chinese stimulus measures would boost demand for industrial metals. Additionally, Rio Tinto announced it was in talks to acquire Arcadium Lithium, positioning itself to benefit from the growing demand for critical minerals used in green energy, particularly lithium. Arcadium Lithium is expected to become the third-largest lithium producer globally by 2027, with operations in Argentina, Australia, and Canada.
In the commodities market, oil prices spiked due to speculation that Israel might target Iranian oil facilities. This speculation arose after Iran launched over 180 ballistic missiles at Israel last week. Iran, which exports 1.7 million barrels of oil per day, could face significant disruptions in its production, potentially pushing the oil market into a supply deficit.
Further contributing to the upward pressure on oil prices, Hurricane Milton, a category 5 storm, is approaching the west coast of Florida after moving across the Gulf of Mexico. Brent Crude prices climbed above $80 per barrel for the first time in six weeks, reflecting concerns over potential supply disruptions.
Despite the geopolitical tensions and mixed economic signals, the week ended with a positive shift in market sentiment, largely driven by a strong jobs report in the US. However, ongoing uncertainties in both the global economy and political landscape continue to influence investor behaviour.
TEAM plc (LON:TEAM) is building a new wealth, asset management and complementary financial services group. With a focus on the UK, Crown Dependencies and International Finance Centres, the strategy is to build local businesses of scale around TEAM’s core skill of providing investment management services.
