US stocks slipped on Thursday as the focus tentatively turned back to the economy and the monthly jobs report. Meanwhile, worries over the Middle East conflict rumbled in the background.
The S&P 500 (^GSPC) dropped 0.3%, while the Dow Jones Industrial Average (^DJI) fell about 0.6%. The tech-heavy Nasdaq Composite (^IXIC) fell 0.3%. All three gauges closed Wednesday slightly above the flat line.
Some calm has returned to a market rattled by escalating Mideast tensions that have driven sharp gains in oil prices. Israel has yet to launch its promised retaliation to Iran’s missile strike on Tuesday amid efforts by Western and regional leaders to stabilize the situation.
Investors are now bracing for the highly anticipated September jobs report on Friday after a surprise uptick in private payrolls came alongside signs the labor market is loosening up.
The market received more signs of general cooling in the labor market on Thursday. Weekly jobless claims ticked up slightly from the prior week. Meanwhile, planned layoffs in the US dipped from a five-month high, according to a report from Challenger, Gray and Christmas. But the firm’s vice president said the data showed the labor market is at an “inflection point.”
Any new signs of deterioration in the labor market could prompt the Federal Reserve to follow up its 0.5% interest rate cut last month with another jumbo move, despite policymakers’ expectation of a 0.25% cut in November.
Read more: What the Fed rate cut means for bank accounts, CDs, loans, and credit cards
Meanwhile, the Israel-Iran crisis helped drive oil prices higher for a third day, another potential drag on economic activity. Brent crude (BZ=F) and West Texas Intermediate (CL=F) futures were both up more than 4% on Thursday after President Biden remarks involving the possibility of an Israeli retaliatory attack against Iran’s oil facilities.
On the corporate front, Levi Strauss (LEVI) shares tumbled almost 8% after the jeans giant posted a disappointing revenue forecast and said it is considering a sale of its Dockers brand. Tesla’s (TSLA) stock continued to slide in the wake of downbeat delivery figures, as Reuters reported the EV maker has halted US online orders for its cheapest Model 3.
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Energy, Utilities, Tech stocks rise while rest of sectors slump
Energy (XLE) stocks outperformed the broader markets on Thursday as oil spiked over concerns of supply disruptions stemming from the Middle East conflict.
The S&P 500 Utilities (XLU) sector also gained slightly.
The Tech (XLK) sector hovered above the flatline thanks to a rise in Nvidia (NVDA) stock.
Shares of the AI chip giant rose after CEO Jensen Huang told CNBC that demand for the company’s next-generation Blackwell chips is “insane.”
Thursday’s sector action -
Oil spikes nearly 4% on supply disruption fears
Oil rose for a third straight session on Thursday over fears of supply disruptions stemming from the Middle East conflict.
West Texas Intermediate futures (CL=F) gained more than 4%, while Brent futures (BZ=F), the international benchmark, advanced nearly 4% on expectations that Israel will retaliate against Iran after Tehran’s ballistic missile strike on Tuesday.
“Futures remain in a nervous trade” about the chance an Israeli response could hit oil facilities in Iran, Dennis Kissler, BOK Financial’s SVP of trading, wrote in a note on Thursday.
Concerns over possible interruptions through the Strait of Hormuz, a chokepoint for oil shipments, have also sent prices higher.
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Read More: Dow, S&P 500, Nasdaq slip with focus on jobs report, wait for Mideast moves