US stocks closed mixed on Thursday as investors positioned themselves ahead of Friday's crucial July jobs report. The Dow Jones Industrial Average experienced a notable decline, falling 0.85% to 53,885.10. In contrast, the S&P 500 slipped 0.18% to 7,709.96, and the Nasdaq Composite remained relatively flat, easing just 0.06% to 26,348.35. This cautious trading activity was also influenced by rising Treasury yields, with the 10-year yield increasing by about 5 basis points to 4.668%.
In the commodities market, oil prices saw a significant surge, clawing back a substantial portion of the week's earlier losses. Brent crude jumped 3.84% to settle at $82.50 a barrel, while West Texas Intermediate (WTI) rose 2.77% to $77.30. This upward movement in oil prices was partly attributed to escalating tensions in the Middle East, particularly concerns surrounding the Strait of Hormuz after an Iranian parliamentary committee reportedly began reviewing a bill to ban certain vessels from the strait. Gold, however, remained largely unchanged at $4,305.70 an ounce, pausing its recent gains as Treasury yields increased.
The upcoming July jobs report, scheduled for Friday at 8:30 AM Eastern Time, is anticipated to be a critical determinant for near-term market direction, affecting yields, the dollar, gold, and overall risk appetite. Economists are forecasting an increase of 80,000 payrolls, following a lower-than-expected gain of 57,000 in June. A soft jobs report could revive the falling-yield backdrop that previously boosted metals and risk assets, while a strong report might extend the firmer-dollar trend and test the current strength of both gold and the equity rally. The Federal Reserve's potential interest rate decisions are heavily dependent on this data, with markets currently pricing in a roughly 58% chance of a rate hike in September.
