Canada’s main stock index opened lower on Thursday due to a fall in mining stocks, as investors assessed U.S. jobs data, while markets remained concerned about escalating conflict in the Middle East.

At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 67.62 points, or 0.28%, at 23,933.93.

Wall Street opened lower on Thursday after a moderate rise in jobless claims sparked worries about the health of the labor market.

The Dow Jones Industrial Average fell 97.0 points, or 0.23%, at the open to 42,099.53. The S&P 500 fell 11.4 points, or 0.20%, at the open to 5,698.19, while the Nasdaq Composite dropped 65.6 points, or 0.37%, to 17,859.486 at the opening bell.

A Labor Department report showed the number of Americans filing new applications for unemployment benefits was 225,000 for the week ended Sept. 28, compared with an estimate of 220,000, according to economists Reuters polled.

Odds that the U.S. central bank will trim rates by 25 basis points at its November meeting now stand at 64.5%, up from 50.7% a week ago, according to the CME Group’s FedWatch Tool.

Focus now turns to Friday’s nonfarm payrolls data for the month of September.

Investors have been wary for the last two sessions as they contemplated the scale of Israel and the United States’ response to Iran’s recent attack on Israel. The CBOE volatility index, Wall Street’s fear gauge, hovered at more than three-week highs at 19.74.

“We’ll see some cautiousness due to two factors: the war headlines that continue to impact the equities market and of course, tomorrow’s unemployment data,” said Peter Cardillo, chief market economist, Spartan Capital Securities.

“It’s safe to say that we’ll probably have a mixed market session today as investors’ cautiousness rises ahead of tomorrow’s key macro data of the month.”

The Institute for Supply Management’s survey on service sector activity, which makes up the majority of the U.S. economy is due at 10 a.m. ET.

U.S. stocks have rallied for much of the year, with the benchmark S&P 500 confirming a bull rally and logging gains in eight of the previous nine months on expectations of lower borrowing costs.

Tech stocks have led the charge on the prospect of their earnings getting a boost from artificial intelligence integration.

Investors will also assess comments from Fed policymakers Raphael Bostic and Neel Kashkari later in the day. Richmond Fed President Thomas Barkin said on Wednesday that sticky inflation could limit the magnitude of further interest rate cuts next year.

Meanwhile, a workers’ strike on the East and Gulf coasts entered its third day. Morgan Stanley economists said a prolonged stoppage could raise consumer prices, with food prices likely to react first.

Global stocks dipped as European and Asian share indexes broadly retreated on Thursday, while oil prices rose further as markets weighed the risk of a widening Middle East conflict.

Euro zone stocks were last down 0.8%, as investors digested weak business activity survey data from the bloc, while MSCI’s all-country index also slipped 0.2%.

Asia-Pacific shares outside Japan had earlier shed 1%, largely driven by Hong Kong stocks sagging after a sizzling rally, while several markets, including mainland China and South Korea, were closed for the day.

Japan’s Nikkei bucked the trend, up 2% after the country’s newly elected prime minister Shigeru Ishiba said it was not the time to raise rates after meeting the central bank governor Kazuo Ueda. Bank of Japan board member Asahi Noguchi later said rates would increase cautiously and slowly.

Geopolitical tensions loomed large, after Israel bombed Beirut early on Thursday, following a year of clashes with Iran-backed Hezbollah.

Oil prices gained on Thursday as concerns grew that the conflict could disrupt crude oil flows from the key exporting region, overshadowing a stronger global supply outlook.

Brent and U.S. crude futures gained around $1 each and were up at $71.11 and $74.83 respectively.

“Oil’s had a good week. But in context, you’re looking at kind of low 70s versus summer levels in the 80s. So I don’t think there’s a signal from the market to say, brace yourself for major escalation… But it’s a volatile situation,” said Eren Osman, managing director of wealth management at Arbuthnot Latham.

Safe haven flows in the wider market have so far been muted. Spot gold dipped 0.5% on the day to $2,644.99, but remained near a record high.

Treasury yields rose on Wednesday after a strong private payrolls report added to evidence of a healthy U.S labor market, lessening the risk of a big downside miss for Friday’s non-farm payrolls data.

Two-year Treasury yields were little changed on Thursday at 3.6539%, while 10-year yields were at 3.8056%.

Markets imply a 35% chance the Fed will cut interest rates by another 50 basis points in November, compared with almost 60% last week, and have around 70 basis points of easing priced in by year-end.

In currencies, the euro was broadly flat at $1.1038, and not far from Wednesday’s low of $1.10325, a level last seen on Sept. 12, while the US dollar index gained 0.2% to 101.88.

Sterling fell 1.1% to $1.3115 after Bank of England Governor Andrew Bailey told the Guardian newspaper that the central bank could become a “bit more aggressive” on rate cuts if inflation continued to ease.

Reuters