Nasdaq leads stock declines while oil spikes on Iran attack

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• Tue, October 1, 2024 at 12:05 PM MDT

  Super Micro Computer falls after 10-for-1 stock split

  Super Micro Computer (SMCI) fell more than 3% on Tuesday after the company underwent a 10-for-1 stock split after the market close on Monday.

  Stock splits, which increase the number of shares in circulation (therefore reducing the overall price per share), have risen in popularity as companies seek to increase accessibility to attract a wider crop of investors.

  Other megacap stocks, including chipmaker Nvidia (NVDA) and retailer Walmart (WMT), have also implemented this strategy.

  Tuesday’s move to the downside comes after the AI server maker sank double digits last week after the Wall Street Journal reported that the US Department of Justice is investigating the company for potential accounting violations.

• Tue, October 1, 2024 at 11:22 AM MDT

  Oil prices jump the most in nearly a year

  Oil prices spiked on Tuesday after Iran fired over 100 ballistic missiles against Israel, pushing prices to the highest level in nearly one year.

  West Texas Intermediate (CL=F) rose more than 5% to trade just below $72 per barrel. Brent (BZ=F), the international benchmark price, also climbed roughly 5% to hover firmly above $75 per barrel.

  One concern around the crude market’s rise is the impact it could have on inflation, as higher energy prices over the longterm can often increase input costs for goods and services. This could potentially lead to more price increases across the board, including non-energy categories.

  James Reilly, senior markets economist at Capital Economics wrote on Tuesday that “much remains uncertain” in response to Tuesday’s spike in prices.

  He argued 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.”

  “In any event, the impact on oil prices will remain the key channel of transmission to the global economy,” the economist added, noting Iran accounts for about 4% of global oil output. “An important consideration will be whether Saudi Arabia increases production if Iranian supplies were disrupted.”

  Reilly said, as a rule of thumb, a 5% increase in oil prices adds about 0.1%-points to headline inflation in advanced economies like the United States.

  “As such, we think that it would take a much larger (and sustained) increase in oil prices to have a bearing on central bank policy.”

• Tue, October 1, 2024 at 10:35 AM MDT

  Sector watch: Energy, utilities lead while tech lags

  Energy (XLE) and tilities (XLU) led Tuesday’s sector action, up about 1.8% and 0.4%, respectively.

  Energy saw a significant boost after crude oil (CL=F) jumped about 4% to trade just under $71 a barrel after headlines circulated Tuesday morning that Iran is preparing a missile strike against Israel. Brent (BZ=F), the international benchmark price, also rose to hover north of…