Oil prices gained as prospects for a lasting agreement to reopen the Strait of Hormuz remained elusive, heightening supply concerns and pushing energy markets higher.
Bond markets declined in response, with Treasury yields rising across the curve. The front end led the move, signaling that traders expect the Federal Reserve to hold a hawkish stance. Statements from Fed Chair Kevin Warsh reinforced that view.
Resilient economic data has further supported expectations for higher-for-longer interest rates, strengthening the case for the Fed to maintain a restrictive policy.
Equity markets broadly eased Thursday ahead of the jobs data. The Dow Jones Industrial Average closed at 53,885, down 0.9 percent. The S&P 500 fell 0.2 percent to 7,710. The Russell 2000 dropped 0.6 percent to 3,002. The Nasdaq Composite slipped 0.1 percent to 26,348.
Rising yields also pressured corporate financing. Alphabet executed a $25 billion, 10-part bond sale, a deal that illustrates the higher borrowing costs now facing large issuers.
Asian stock markets were expected to open lower Friday as geopolitical tensions weighed on sentiment.
Friday's U.S. jobs report will be the next test. Strong employment figures could reinforce expectations for a hawkish Fed; weaker numbers might temper them.
