US open: Stocks open lower as crude hits the skids
US stocks opened on a mixed note on Tuesday, coming off session lows as crude oil futures skidded lower amid reports that Saudi oil output could be fully restored as quickly as had originally been anticipated.
As of 1530 BST, the Dow Jones Industrial Average was down 0.15% at 27,035.32, while the S&P 500 was 0.01% weaker at 2,997.76 and the Nasdaq Composite was 0.08% softer at 8,147.32.
The Dow Jones opened 41.50 points lower on Tuesday after Wall Street stocks closed weaker on Monday, snapping the Dow's eight-day winning streak, after an attack on a Saudi Arabian oilfield and the country's key processing facility sparked fears that a surge in crude prices could add to the slowdown in the global economy.
According to Reuters, which cited two Saudi sources, the kingdom's oil output could be fully-restored in two or three weeks' time and 70.0% of lost production was already close to being back online.
Nonetheless, as Fiona Cincotta, senior market analyst at CityIndex, pointed out: "Oil is experiencing heightened levels of volatility and we don’t expect this to ends soon.
"Traders will remain fixated on recovery time for the production facility, but also on what Trump will do next. Any indication that Trump could retaliate against Iran could send oil prices higher once again."
To take note of, some reports citing Saudi and US investigators said there was believed to be a "very high probability" that the cruise missile attack against Saudi oil installations had been launched from inside Iran.
In parallel, front month West Texas Intermediate crude oil futures were sliding by 6.25% to $59.20 a barrel on the ICE.
Not surprisingly, energy was pacing decliners among the S&P 500's sector indices and falling by 1.52%.
Meanwhile, market participants were shifting their focus slightly, from Middle Eastern woes to the start of the Federal Reserve's two-day policy meeting.
Market participants and analysts alike have been divided on what the central bank will do at its meeting, with the recent increase in energy prices leading some investors to think the Fed may not quite be in such a rush to lower interest rates yet again.
On a related note, Credit Suisse's strategy team pointed out that the impact of a higher oil price on the US economy was close to zero given that America was no longer a net importer.
SpreadEx analyst Connor Campbell chipped in, saying: "Not only have the markets got to worry about the situation between Saudi Arabia and Iran, but the prospect of tomorrow night’s Fed meeting.
"What was once a certain rate cut has seen some doubt creep in, thanks to improving relations between the Washington and Beijing and a one-year high US core inflation reading."
On the data front, sentiment among US housebuilders improved a little in September, according to data released on Tuesday, although the trade spat between the US and China has been taking its toll.
The National Association of Home Builders/Wells Fargo housing market index ticked up to 68 this month from an upwardly-revised 67 in August, beating expectations for a reading of 66 and hitting its best level of the year.
Elsewhere, US industrial output bounded past forecasts during the previous month amid widespread gains by categories, but economists said the underlying trend continued to point lower.
According to the US Department of Commerce, in August total industrial production jumped at a 0.6% month-on-month pace, easily outpacing forecasts for an increase of 0.2%.
In corporate news, Apple shares dipped slightly lower in early trade as the tech giant readied itself to stand up against a $14bn tax charge from the European Commission.
Adobe and FedEx were both set to report earnings throughout the course of the day.