Oil prices experienced a significant surge on Thursday, with Brent crude rising nearly 4% and the main US contract WTI gaining almost 3%, following reports that a potential agreement might bar US and Israeli vessels from passing through the Strait of Hormuz. This unexpected development shifted market sentiment regarding transit risks from an anticipated deal to an unclear outlook, with Brent approaching $83.50 per barrel and WTI topping $78.30 per barrel.
The increase in oil prices weighed heavily on US equity markets, causing the Dow to retreat from a record close and the Nasdaq to end flat. The S&P 500 fell by 0.18%, the Nasdaq by 0.06%, and the Dow by 0.83%. European markets presented a mixed picture; London's FTSE 100 lost 0.2%, while Frankfurt and Paris saw modest gains. Asian tech-heavy indices, including Seoul and Tokyo, suffered significant losses due to concerns over AI investments.
Investors are now keenly focused on Friday's US monthly government jobs report, particularly the July Nonfarm Payrolls. The market anticipates 80,000 new jobs, a notable increase from June's 57,000. This data is expected to heavily influence the Federal Reserve's policy decisions and future rate hike expectations, especially given that rising oil prices have reignited inflation concerns and pushed US Treasury yields higher across the board. The 10-year US Treasury note yield climbed 5 basis points to 4.66%.
