Oil prices jumped and stock indexes faltered as investors weighed the risk of escalating conflict in the Middle East against signs that the U.S. economy is ticking along.
Meanwhile, largely upbeat data has helped ease worries about the U.S. labor market ahead of Friday’s jobs report. On Wednesday, ADP data indicated private-sector hiring picked up in September. Weekly jobless claims, however, came in a little higher than expected Thursday.
“The labor market is not in great shape, but it’s not in bad shape either. It’s doing okay and that’s the key,” said Joe Quinlan, head of CIO market strategy for Merrill and Bank of America Private Bank. “We need a good labor market to keep this economy growing.”
Oil prices climbed. Brent crude and WTI crude rose more than 5%, logging their largest one-day gains since the early stages of Israel’s war on Hamas a year ago.
Stock indexes edged lower. All three major indexes fell, led by the Dow industrials, which dropped 0.4%. Tesla shares remained under pressure, losing more than 3% after Wednesday’s delivery update.
U.S.-listed Chinese stocks wobbled. Tech stocks such as Alibaba fell 2% as the rally set off by Beijing’s stimulus blitz showed signs of fading. Hong Kong’s Hang Seng Index fell 1.5%; mainland Chinese markets were closed.
Treasury yields rose. The yield on the 10-year note rose to 3.849%, having settled Wednesday at 3.78%.
The dollar strengthened, buoyed by signs of U.S. economic strength. Sterling weakened around 1% versus the greenback after the Bank of England indicated it could cut rates more aggressively if inflation continues to ease.
Japan’s Nikkei 225 rose 2%. The index was boosted by a fall in the yen after new Prime Minister Shigeru Ishiba signaled caution on raising interest rates further.
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Read More: Dow Falls; Oil Prices Jump