US stocks fell on Thursday as focus temporarily shifted to the economy and the monthly jobs report. Meanwhile, concerns about conflict in the Middle East echoed in the background.
The S&P 500 (^GSPC) fell 0.2%, while the Dow Jones Industrial Average (^DJI) fell about 0.7%. The Nasdaq Composite (^IXIC) fell 0.4%. All three metrics closed Wednesday just above the flat line.
Some calm has returned to the market, which was rocked by escalating tensions in the Middle East, which led to sharp rises in oil prices. Israel has not yet released its promise to respond to the Iranian missile attack on Tuesday, amid efforts by Western and regional leaders to stabilize the situation.
Investors are now preparing for the highly anticipated September jobs report to be released on Friday after a surprise rise in private payrolls came alongside signs that the labor market is softening.
The market received more signs of a general slowdown in the labor market on Thursday. Weekly unemployment claims rose slightly from the previous week. Meanwhile, planned layoffs in the US have fallen from a five-month high, according to a report from Challenger, Gray and Christmas. But the company'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 Fed to follow up on last month's 0.5% interest rate cut with another massive move, despite policymakers' expectations of a 0.25% cut in November.
Read more: What a Fed rate cut means for bank accounts, CDs, loans and credit cards
Meanwhile, the Israel-Iran crisis helped push oil prices higher for a third day, representing another potential drag on economic activity. Brent (BZ=F) and West Texas Intermediate (CL=F) futures rose about 4% on Thursday.
On the corporate front, shares of Levi Strauss ( LEVI ) fell nearly 8% after the jeans giant posted a disappointing revenue forecast and said it was considering selling its Dockers brand. Tesla (TSLA) stock continued to fall in the wake of downbeat delivery numbers, with Reuters reporting that the electric car maker halted US online orders for its cheapest Model 3.
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Energy, utilities and technology stocks rose while the rest of the sectors fell
Energy stocks (XLE) outperformed broader markets on Thursday as oil prices rose on fears of supply disruptions caused by conflict in the Middle East.
The S&P 500 Utilities Index (XLU) also rose slightly.
The technology sector (XLK) is hovering above the flat line thanks to a rise in Nvidia (NVDA) shares.
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.”
Sector movements on Thursday -
Oil rises by about 4% amid fears of supply disruption
Oil prices rose for the third straight session on Thursday amid fears of supply disruption due to conflict in the Middle East.
West Texas Intermediate (CL=F) futures rose more than 4%, while Brent crude futures (BZ=F), the international benchmark, advanced about 4% amid expectations that Israel will retaliate against Iran after Tehran's ballistic missile strike on Tuesday.
“Futures remain in a nervous trade” over the possibility that Israeli retaliation could hit oil facilities in Iran, Dennis Kessler, senior vice president of trading at Korea Bank Financial, wrote in a note Thursday.
Concerns about potential outages through the Strait of Hormuz, a corridor for oil shipments, also pushed prices higher.
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