By US markets dipped again on Thursday as escalating geopolitical tensions in the Middle East pushed oil prices higher.
The Dow Jones Industrial Average fell 285 points, or 0.7% while the S&P 500 index was down 0.3% at 5,692.05.
The Nasdaq Composite also declined 0.18% to 17,891.87 on Thursday.
This comes as US President Joe Biden reportedly told reporters he was “discussing” if he would support Israel striking Iran’s oil facilities.
Oil prices jump as market awaits Israel’s response
Oil prices jumped again today as traders await a response from Israel to Iran’s missile attack on Tuesday.
Reports suggest Israel could target Iran’s oil facilities, which may affect oil supply from the country.
Iran produced around 3.3 million barrels per day of oil in August, according to data from the Organization of the Petroleum Exporting Countries.
Experts believe if Iran’s oil facilities are targeted, the world could be short of 4% of total supplies.
Brent crude oil prices jumped more than 4% to hit a more than one-month high of $77.58 per barrel on Thursday.
US benchmark West Texas Intermediate crude also rose over 4% to hit a one-month high of $73.89 per barrel.
Tech, energy companies in the green
Even as escalating tensions and high crude oil prices push the US markets into bear territory, the outperformance of technology and energy sectors limited losses on Thursday.
Shares of most information technology companies rose on Thursday.
NVIDIA Corporation’s stock jumped more than 3%. Advanced Micro Devices Inc and Micron Technology Inc were among the other notable gainers.
Data from the Institute for Supply Management in the US showed in September, the services sector expanded at the fastest pace since February 2023. This aided equities on Thursday.
Meanwhile, most energy companies performed well as oil prices continued to climb.
Shares of ExxonMobil Corporation and Chevron Corporation rose 0.8% and 0.7% respectively on Thursday.
Additionally, Valero Energy and Diamondback Energy also rose 2% each.
Bank stocks open in the red
The shares of SPDR S&P Bank ETF opened in the red but recouped its losses.
Other major banks such as Bank of America and JPMorgan Chase declined on Thursday.
Shares of JPMorgan Chase were down by nearly 0.9%, while those of the Bank of America dipped 0.9% at the opening bell.
Meanwhile, Berkshire Hathaway, a US multinational conglomerate, reportedly sold another chunk of Bank of America shares during the past three trading sessions.
According to a CNBC report, Warren Buffett’s conglomerate dumped more than 8.5 million shares of the bank worth $338 million, according to a new regulatory filing.
Economic data releases
Amid the backdrop of heightened tensions in the Middle East and soaring crude prices, investors are looking for further cues on the health of the US economy.
On Thursday, the US Department of Labor said people filing for unemployment claims for the first time in the country last week rose to 225,000 from 219,000 in the previous week.
Rising claims for unemployment benefits indicate that the labor market in the US is cooling, which augurs well for further rate cuts by the Fed.
However, robust growth in the services sector in the country may hint at a more resilient economy.
Kallum Pickering, chief economist at Peel Hunt, said on Bloomberg Television:
I am of course nervous heading into tomorrow’s jobs report. If the unemployment rate ticks up, I wouldn’t be surprised that markets would shift back toward expecting 50 basis points and then it is a question of how the Fed may react.
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