Iran-backed Houthi militants attacked Saudi Arabia on Thursday, wounding eleven civilians and prompting Riyadh to warn that the Middle East conflict is widening. The strike came a day before the U.S. Labor Department's July jobs report, due Friday, a release investors are watching for clues on the Federal Reserve's next move.
Houthi militants in Yemen attacked Saudi Arabia on Thursday, wounding eleven civilians, deepening fears that the Middle East conflict is widening.
U.S. stock futures held near the flatline early Friday as traders awaited the jobs data. Dow futures dipped 66 points, or 0.1%, while S&P 500 futures were little changed. Nasdaq 100 futures rose 54 points, or 0.2%.
Saudi Arabia warns of a widening conflict
Seven Saudis, one Yemeni, two Egyptians and one Pakistani national were wounded in the strikes, a spokesperson for the Saudi-led military coalition told Reuters. Neither the Houthis nor Iran offered immediate comment.
The attack comes despite recent reports of progress toward reopening the Strait of Hormuz. Iran and Oman are said to be nearing an agreement on the waterway, but President Donald Trump declined to confirm a deal had been reached, saying only that the strait had been "sort of open right now." Shipping data cited in media reports show tanker traffic through the strait remains well below levels seen before the Iran war broke out in late February.
Brent crude, which has swung throughout the year on developments in the conflict, was last higher by 1.2% at $83.46 a barrel.
Jobs report keeps the Fed's next move in play
The Labor Department's monthly nonfarm payrolls report, due Friday, is expected to show the economy added 88,000 jobs last month, up from 57,000 in June, pointing to a labor market that is resilient even as hiring stays muted and layoffs remain low.
Unemployment is expected to hold at 4.2%, matching June's level. Yet the labor force shrank by 720,000 from May to June, which recent data has tied to Trump's immigration crackdown and baby-boomer retirements. The participation rate, the share of working-age Americans working or looking for work, slipped to 61.5% in June, its lowest since the pandemic-hit month of March 2021.
Separate figures this week also showed a contraction in services-sector employment, while private-sector employment increased by 44,000 in July, compared to 95,000 in June. Still, Capital Economics' senior North America economist, Thomas Ryan, said the broader economy's underlying demand looks solid based on recent growth figures.
The mixed picture leaves investors debating how the Fed will approach interest rate decisions in the coming months: raising borrowing costs could cool energy-fueled inflation, but at the risk of denting the labor market and the wider economy.
Source: Investing.com
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