Stock market today: Indexes fall, oil surges on Middle East turmoil ahead of jobs report

• Indexes fell Thursday before Friday's nonfarm payrolls report for September.
• Traders are watching rising risks to oil supplies as tensions in the Middle East escalate.
• Crude prices spiked Thursday after comments from President Biden on possible retaliation by Israel.

Markets closed lower on Thursday amid rising fears over spiraling Middle East tensions and as traders prepared to digest the September nonfarm payrolls report on Friday morning.

The Dow Jones Industrial Average fell nearly 200 points, while the S&P 500 and the Nasdaq both stumbled. Treasury yields rose, with the 10-year bond yield up seven basis points to 3.855%.

The decline was fueled by further fears of escalating conflict between Israel and Iran.

In remarks to reporters, President Joe Biden was vague about the potential for retaliatory strikes by Israel against Iran, but suggested it's a possibility.

The world has been on edge after Iran launched a missile attack against Israel on Tuesday, retaliating for Israel's killing of the Hezbollah leader.

Biden's comments pushed crude prices higher. US oil spiked 5.5% to $73.98 a barrel and Brent prices rose more than 5% to trade at $77.86.

If the conflict destroys Iran's oil infrastructure, oil prices could surge 161% to over $200 a barrel, according to SEB's chief commodities analyst Bjarne Schieldrop.

Weekly jobless claims on Thursday came in at 225,000, an increase of 6,000 from the week before, according to Labor Department data released Thursday. Economists had expected an increase of just 2,000.

Investors are eagerly awaiting the September jobs report, due Friday, for further signs of labor market health. The report is expected to show the unemployment rate staying flat at 4.2%, and an increase of 150,000 jobs in September, more than the 142,000 increase from August.

The data will be a key indicator on the health of the labor market as the Federal Reserve makes its next rate-cut decision after its jumbo 50 basis point rate cut last month.

Markets are pricing in a 65% chance of a smaller 25 basis point cut in November, according to the CME FedWatch Tool.

Here's where US indexes stood at the 4:00 p.m. closing bell on Thursday:

• S&P 500: 5,699.97, down 0.17%
• Dow Jones Industrial Average: 42,011.59, down 0.44% (184.93 points)
• Nasdaq composite: 17,918.47, down 0.04%

Here's what else was going on Thursday:

• Why China's massive stimulus effort might not have any effect until next year.
• Costco is selling platinum bars as it expands its precious-metals business after huge success selling gold
• Nvidia stock jumps after CEO Jensen Huang says "demand for Blackwell is insane"

In commodities, bonds, and crypto:

• Oil futures rose. West Texas Intermediate crude spiked 5.5% to $73.98 a barrel. Brent crude, the international benchmark, rose 5.3% to $77.86.
• Gold was up 0.3% $2,678 an ounce.
• The 10-year Treasury yield was up seven basis points to 3.855%.
• Bitcoin was up 1.2% to $61,075.