U.S. stocks closed lower on Thursday as rising oil prices and escalating tensions in the Middle East weighed on investor sentiment ahead of September's key payrolls report.
The Dow Jones Industrial Average dropped 184.9 points, or 0.4%, to close at 42,011.6. The S&P 500 fell 0.2% to 5,699.9, while the Nasdaq Composite finished flat at 17,918.5, as gains in Nvidia helped limit further losses.
The market's weak performance followed a sharp rise in oil prices, with U.S. crude futures climbing over 5% on Thursday, extending their weekly advance to more than 8%.
The surge in energy prices was driven by growing concerns over the conflict between Israel and Iran, with the situation intensifying after Iran launched a missile attack on Israel earlier this week.
Investors are now bracing for further instability as Israel continues its ground offensive into Lebanon.
Energy stocks rallied alongside rising crude prices, with the S&P 500's energy sector gaining 5.9% for the week, putting it on track for its best weekly performance in over a year.
Among data releases, weekly jobless claims came in slightly higher than expected, as investors turn focus toward September's payrolls report due on Friday.
On the bond markets, 10-year and 2-year rates were at 3.846% and 3.705%, respectively.